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Filed Pursuant to Rule 424(B)(3)
Registration No. 333-156778
PROSPECTUS
Fixed Rate Cumulative Perpetual Preferred Stock, Series A
Warrant to Purchase 192,967 shares of Common Stock
192,967 shares of Common Stock
This prospectus relates
to the potential resale from time to time by selling securityholders of some or
all of the shares of our Fixed Rate Cumulative Perpetual Preferred Stock, Series A,
or the Series A Preferred Stock, a warrant to purchase 192,967 shares of
common stock, or the Warrant, and any shares of common stock issuable from
time to time upon exercise of the Warrant. In this prospectus, we refer to the
shares of Series A Preferred Stock, the Warrant and the shares of common
stock issuable upon exercise of the Warrant, collectively, as the Securities.
The Series A Preferred Stock and the Warrant were originally issued by us
pursuant to that certain Letter Agreement dated December 19, 2008, and the
related Securities Purchase Agreement Standard Terms, between us and the
United States Department of the Treasury, which we refer to as the initial
selling securityholder, in a transaction exempt from the registration
requirements of the Securities Act of 1933, as amended, or the Securities Act.
The initial selling
securityholder and its successors, including transferees, which we collectively
refer to as the selling securityholders, may offer the Securities from time to
time directly or through underwriters, broker-dealers or agents and in one or
more public or private transactions and at fixed prices, prevailing market
prices, at prices related to prevailing market prices or at negotiated prices.
If the Securities are sold through underwriters, broker-dealers or agents, the
selling securityholders will be responsible for underwriting discounts or
commissions or agents commissions.
We will not receive any
proceeds from the sale of the Securities by the selling securityholders.
The Series A Preferred
Stock is not listed on an exchange, and, unless requested by the initial
selling securityholder, we do not intend to list the Series A Preferred
Stock on any exchange.
Our common stock is
traded on the NASDAQ Global Select Market under the symbol BARI. On January 14,
2009, the closing price of our common stock on the NASDAQ Global Select Market
was $20.84 per share. You are urged to obtain current market quotations of the
common stock.
Our principal executive
offices are located at One Turks Head Place, Providence, Rhode Island 02903,
and our telephone number is (401) 456-5000.
You
should refer to the risk factors included in our periodic reports and other
information that we file with the Securities and Exchange Commission and
carefully consider that information before buying our securities. See Risk
Factors on page 3.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of the Securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
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The
Securities are not deposits, savings accounts or other obligations of any bank
or savings association and are not insured by the Federal Deposit Insurance
Corporation or any other governmental agency.
The date of this
prospectus is February 11, 2009.
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ABOUT THIS PROSPECTUS
This prospectus is part
of a registration statement we filed with the Securities and Exchange
Commission, or the SEC, using a shelf registration process. Under this shelf
registration process, the selling securityholders may, from time to time, offer
and sell, in one or more offerings, the Securities described in this
prospectus.
We may provide a
prospectus supplement containing specific information about the terms of a
particular offering by the selling securityholders. The prospectus supplement
may also add, update or change information in this prospectus. If the
information in this prospectus is inconsistent with a prospectus supplement,
you should rely on the information in that prospectus supplement. You should
read both this prospectus and, if applicable, any prospectus supplement. See Where
You Can Find More Information for more information.
In this prospectus, BancorpRI,
we, our, ours, and us refer to Bancorp Rhode Island, Inc., and its
subsidiaries, unless the context otherwise requires. References to BankRI
mean Bank Rhode Island, which is our principal bank subsidiary.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
We make certain forward
looking statements in this prospectus and in other documents that we
incorporate by reference into this prospectus that are based upon our current
expectations and projections about current events. We intend these forward looking statements to
be covered by the safe harbor provisions for forward looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended, and we are including this statement for purposes of these safe harbor
provisions. You can identify these
statements by reference to a future period or periods by our use of the words estimate,
project, may, believe, intend, anticipate, plan, seek, expect
and similar terms or variations of these terms.
These forward looking statements include:
·
statements
of our goals, intentions and expectations;
·
statements
regarding our business plans and prospects and growth and operating strategies;
·
statements
regarding the quality of our products and our loan and investment portfolios;
and
·
estimates
of our risks and future costs and benefits.
These forward looking
statements are subject to significant risks, assumptions and uncertainties,
including, among other things, the following important factors that could
affect the actual outcome of future events:
·
significantly
increased competition among depository and other financial institutions;
·
changes
in the interest rate environment that reduce our margins or reduce the fair
value of financial instruments;
·
general
economic conditions, either nationally or in our market area, that are worse
than expected;
·
adverse
changes in the securities markets;
·
credit
risk of lending activities, including changes in the level and trend of loan
delinquencies and write-offs;
·
changes
in managements estimate of the adequacy of the allowance for loan and lease
losses;
·
legislative
or regulatory changes that adversely affect our business;
·
the
ability to enter new markets successfully and capitalize on growth
opportunities;
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·
effects
of and changes in trade, monetary and fiscal policies and laws, including
interest rate policies of the Federal Reserve Board;
·
timely
and efficient development of and acceptance of new products and services;
·
changes
in consumer spending, borrowing and savings habits;
·
effects
of changes in accounting policies and practices, as may be adopted by the bank
regulatory agencies and other regulatory and accounting bodies;
·
changes
in our organization, compensation and benefit plans;
·
costs
and effects of litigation and unexpected or adverse outcomes in such
litigation; and
·
our
success in managing risks involved in the foregoing.
For other factors, risks
and uncertainties that could cause our actual results to differ materially from
estimates and projections contained in forward-looking statements, please read
the Risk Factors sections contained in our reports to the SEC. Our forward
looking statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or investments we may
make. We do not assume any obligation to
update any forward looking statements.
SUMMARY
The
following summary highlights selected information contained elsewhere in this
prospectus and does not contain all of the information that you should consider
before investing in our securities. You should read the entire prospectus
carefully including the Risks Factors and the documents that we refer to or
incorporate by reference.
Bancorp
Rhode Island, Inc. is the holding company for Bank Rhode Island, a
commercial bank chartered as a financial institution in the State of Rhode
Island and headquartered in Providence.
BankRI was formed in March 1996 as a result of the acquisition of
12 branches divested by Fleet Financial Group as part of the Fleet/Shawmut
merger. BankRI became our wholly-owned
subsidiary upon completion of our reorganization into a holding company on September 1,
2000. As of September 30, 2008, we
had total assets of $1.49 billion, total deposits of $1.02 billion and total
shareholders equity of approximately $114 million.
We
provide a community banking alternative in the greater Providence area where we
currently operate 16 branches in Rhode Islands three most populous
counties. We augment our branch network
through online banking services and automatic teller machines (ATMs), both
owned and leased, located throughout the state.
Our
market is dominated by three large banking institutions, two national and one
regional. Based on total deposits as of June 30, 2008 (excluding one bank
that draws its deposits primarily from the internet), BankRI is the fifth
largest bank in Rhode Island and the only mid-sized commercially focused bank
headquartered in Providence, the States capital. BankRI offers its customers a
wide range of business, commercial real estate, consumer and residential loans
and leases, deposit products, nondeposit investment products, cash management
and online banking services, private banking and other banking products and
services designed to meet the financial needs of individuals and small- to
mid-sized businesses. As a full-service community bank, BankRI seeks to
differentiate itself from its large bank competitors through superior personal
service, responsiveness and local decision-making. The Banks deposits are
insured by the FDIC, subject to regulatory limits.
Recent Developments
On December 19,
2008, we entered into a Letter Agreement and a Securities Purchase Agreement -
Standard Terms with the United States Treasury Department, pursuant to which we
agreed to issue and sell, and the
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Treasury agreed to purchase (i) 30,000 shares of
our Series A Preferred Stock, having a liquidation preference of $1,000
per share and (ii) the Warrant to purchase up to 192,967 shares of our
common stock, par value $.01, at an initial exercise price of $23.32 per share.
The Warrant was immediately exercisable upon its issuance and will expire on December 19,
2018.
We are
registering the shares of the Series A Preferred Stock and the Warrant
sold to the Treasury pursuant to the transaction described above and elsewhere
in this prospectus, as well as the shares of our common stock to be issued upon
the exercise of the Warrant.
Corporate Information
Our
executive offices are located at One Turks Head Place, Providence, Rhode Island
02903, our telephone number is (401) 456-5000 and our Internet address is
http://www.bankri.com. The information
on our Internet website is not incorporated by reference in this prospectus.
RISK FACTORS
Investment
in our securities involves a high degree of risk. You should carefully consider
the risks described in the section entitled Risk Factors in any prospectus
supplement as well as in the section entitled Managements Discussion and
Analysis of Financial Condition and Results of Operations contained in our
annual report on Form 10-K for the period ended December 31, 2007 and
in our updates to those Risk Factors contained in our quarterly reports on Form 10-Q,
as well as other information in this prospectus, any accompanying prospectus
supplement, and any other documents or reports incorporated by reference
herein, before purchasing any of our securities. Each of the risks described in
these sections and documents could materially and adversely affect our
business, financial condition, results of operations and prospects, and could
result in a loss of your investment.
USE OF PROCEEDS
We
will not receive any proceeds from any sale of the Securities by the selling securityholders.
RATIO OF EARNINGS TO FIXED CHARGES
Our consolidated ratio of
earnings to fixed charges for each of the five fiscal years ended December 31,
2007 and each of the nine-month periods ended September 30, 2008 and 2007
are as follows:
|
|
Nine Months
Ended
September 30,
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
2007
|
|
2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
Ratio of
earnings to fixed charges (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Including
interest on deposits
|
|
1.37
|
|
1.29
|
|
1.29
|
|
1.29
|
|
1.53
|
|
1.65
|
|
1.54
|
|
Excluding interest
on deposits
|
|
1.97
|
|
1.81
|
|
1.83
|
|
1.66
|
|
2.15
|
|
2.43
|
|
2.29
|
|
(1) Ratios
were derived from our quarterly report on Form 10-Q for the nine months
ended September 30, 2008 and 2007, and from our annual reports on Form 10-K
for the years ended December 31, 2007, December 31, 2006, December 31,
2005, December 31, 2004 and December 31, 2003.
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For purposes of calculating the ratio of earnings to
fixed charges, earnings are the sum of:
·
income before taxes; and
·
fixed charges.
For
purposes of calculating the ratio of earnings to fixed charges, fixed charges
are the sum of:
·
interest expenses, including interest
on deposits; and, in the second alternative shown above, excluding interest on
deposits; and
·
that portion of net rental expense
deemed to be the equivalent to interest on long-term debt.
DESCRIPTION OF SERIES A PREFERRED
STOCK
The
following is a brief description of the terms of the Series A Preferred
Stock that may be resold by the selling securityholders. This summary does not
purport to be complete in all respects. This description is subject to and
qualified in its entirety by reference to our Articles of Incorporation, as
amended, and the Certificate of Designations with respect to the Series A
Preferred Stock, attached as Exhibit A to the Certificate of Vote(s) Authorizing
Issuance of a Class or Series of any Class of Shares filed with
the Secretary of State of the State of Rhode Island on December 16, 2008,
referred to herein as the Certificate of Designations, copies of which have
been filed with the SEC and are also available upon request from us.
General
Under
our Articles of Incorporation, we have authority to issue up to 1,000,000
shares of preferred stock, $.01 value per share. We have designated 30,000
shares as Series A Preferred Stock, all of which shares of Series A
Preferred Stock were issued to the initial selling securityholder in a
transaction exempt from the registration requirements of the Securities Act.
The issued and outstanding shares of Series A Preferred Stock are validly
issued, fully paid and nonassessable.
Dividends Payable on Shares of Series A Preferred Stock
Holders
of shares of Series A Preferred Stock are entitled to receive if, as and
when declared by our board of directors or a duly authorized committee of the
board, out of assets legally available for payment, cumulative cash dividends
at a rate per annum of 5% per share on a liquidation preference of $1,000 per
share of Series A Preferred Stock with respect to each dividend period
from December 19, 2008 to, but excluding, February 15, 2014. From and
after February 15, 2014, holders of shares of Series A Preferred
Stock are entitled to receive cumulative cash dividends at a rate per annum of
9% per share on a liquidation preference of $1,000 per share of Series A
Preferred Stock with respect to each dividend period thereafter.
Dividends
are payable quarterly in arrears on each February 15, May 15, August 15
and November 15 of each year during which the Series A Preferred
Stock is outstanding, starting with February 15, 2009. If any dividend
payment date is not a business day, then the next business day will be the
applicable dividend payment date, and no additional dividends will accrue as a
result of the applicable postponement of the dividend payment date. Dividends
payable during any dividend period are computed on the basis of a 360-day year
consisting of twelve 30-day months. Dividends payable with respect to the Series A
Preferred Stock are payable to holders of record of shares of Series A
Preferred Stock on the date that is 15 calendar days immediately preceding the
applicable dividend payment date or such other record date as the board of
directors or any duly authorized committee of the board determines, so long as
such record date is not more than 60 nor less than 10 days prior to the
applicable dividend payment date.
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If we determine not to
pay any dividend or a full dividend with respect to the Series A Preferred
Stock, we are required to provide written notice to the holders of shares of Series A
Preferred Stock prior to the applicable dividend payment date.
We depend on dividends,
distributions and other payments from our banking subsidiary, BankRI, to fund
dividends on our common stock and preferred stock. Payment of dividends by
BancorpRI is also restricted by statutory limitations applicable to all bank
holding companies. These limitations could have the effect of reducing the
amount of dividends we can declare.
Priority of Dividends
With respect to the
payment of dividends and the amounts to be paid upon liquidation, the Series A
Preferred Stock will rank:
·
senior to our common stock and all
other equity securities designated as ranking junior to the Series A
Preferred Stock; and
·
at least equally with all other
equity securities designated as ranking on a parity with the Series A
Preferred Stock, or parity stock, with respect to the payment of dividends and
distribution of assets upon any liquidation, dissolution or winding-up of
BancorpRI.
So long as any shares of Series A
Preferred Stock remain outstanding, unless all accrued and unpaid dividends for
all prior dividend periods have been paid or are contemporaneously declared and
paid in full, no dividend whatsoever shall be paid or declared on BancorpRIs
common stock or other junior stock, other than a dividend payable solely in
common stock. We and our subsidiaries also may not purchase, redeem or
otherwise acquire for consideration any shares of our common stock or other
junior stock unless we have paid in full all accrued dividends on the Series A
Preferred Stock for all prior dividend periods, other than:
·
purchases, redemptions or other
acquisitions of our common stock or other junior stock in connection with the
administration of our employee benefit plans in the ordinary course of business
pursuant to a publicly announced repurchase plan up to the increase in diluted
shares outstanding resulting from the grant, vesting or exercise of
equity-based compensation;
·
purchases or other acquisitions by
broker-dealer subsidiaries of BancorpRI solely for the purpose of
market-making, stabilization or customer facilitation transactions in junior
stock or parity stock in the ordinary course of business;
·
purchases or other acquisitions by
broker-dealer subsidiaries of BancorpRI for resale pursuant to an offering by
BancorpRI of our stock that is underwritten by the related broker-dealer
subsidiary;
·
any dividends or distributions of
rights or junior stock in connection with any shareholders rights plan or
repurchases of rights pursuant to any shareholders rights plan;
·
acquisition of record ownership of
junior stock or parity stock for the beneficial ownership of any other person
who is not BancorpRI or a subsidiary of BancorpRI, including as trustee or
custodian; and
·
the exchange or conversion of junior
stock for or into other junior stock or of parity stock for or into other
parity stock or junior stock but only to the extent that such acquisition is
required pursuant to binding contractual agreements entered into before December 19,
2008 or any subsequent agreement for the accelerated exercise, settlement or
exchange thereof for common stock.
If we repurchase shares
of Series A Preferred Stock from a holder other than the initial selling
securityholder, we must offer to repurchase a ratable portion of the Series A
Preferred Stock then held by the initial selling securityholder.
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On any dividend payment
date for which full dividends are not paid, or declared and funds set aside
therefor, on the Series A Preferred Stock and any other parity stock, all
dividends paid or declared for payment on that dividend payment date (or, with
respect to parity stock with a different dividend payment date, on the
applicable dividend date therefor falling within the dividend period and
related to the dividend payment date for the Series A Preferred Stock),
with respect to the Series A Preferred Stock and any other parity stock
shall be declared ratably among the holders of any such shares who have the
right to receive dividends, in proportion to the respective amounts of the
undeclared and unpaid dividends relating to the dividend period.
Subject to the foregoing,
such dividends (payable in cash, stock or otherwise) as may be determined by
our board of directors (or a duly authorized committee of the board) may be
declared and paid on our common stock and any other stock ranking equally with
or junior to the Series A Preferred Stock from time to time out of any
funds legally available for such payment, and the Series A Preferred Stock
shall not be entitled to participate in any such dividend.
Redemption
The Series A
Preferred Stock may not be redeemed prior to February 15, 2012 unless we
have received aggregate gross proceeds from one or more qualified equity
offerings (as described below) equal to $7,500,000, which equals 25% of the
aggregate liquidation amount of the Series A Preferred Stock on the date
of issuance. In such a case, we may redeem the Series A Preferred Stock,
subject to the approval of the Federal Reserve Board, in whole or in part, upon
notice as described below, up to a maximum amount equal to the aggregate net
cash proceeds received by us from such qualified equity offerings. A qualified
equity offering is a sale and issuance for cash by us, to persons other than
BancorpRI or its subsidiaries after December 19, 2008, of shares of
perpetual preferred stock, common stock or a combination thereof, that in each
case qualify as tier 1 capital of BancorpRI at the time of issuance under the
applicable risk-based capital guidelines of the Federal Reserve Board.
After February 15,
2012, the Series A Preferred Stock may be redeemed at any time, subject to
the approval of the Federal Reserve Board, in whole or in part, subject to
notice as described below.
In any redemption, the
redemption price is an amount equal to the per share liquidation amount plus
accrued and unpaid dividends to but excluding the date of redemption.
The Series A
Preferred Stock will not be subject to any mandatory redemption, sinking fund
or similar provisions. Holders of shares of Series A Preferred Stock have
no right to require the redemption or repurchase of the Series A Preferred
Stock.
If fewer than all of the
outstanding shares of Series A Preferred Stock are to be redeemed, the
shares to be redeemed will be selected either
pro
rata
from the holders of record of shares of Series A Preferred
Stock in proportion to the number of shares held by those holders or in such
other manner as our board of directors or a committee thereof may determine to
be fair and equitable.
We will mail notice of
any redemption of Series A Preferred Stock by first class mail, postage
prepaid, addressed to the holders of record of the shares of Series A
Preferred Stock to be redeemed at their respective last addresses appearing on
our books. This mailing will be at least 30 days and not more than
60 days before the date fixed for redemption. Any notice mailed or
otherwise given as described in this paragraph will be conclusively presumed to
have been duly given, whether or not the holder receives the notice, and
failure duly to give the notice by mail or otherwise, or any defect in the
notice or in the mailing or provision of the notice, to any holder of Series A
Preferred Stock designated for redemption will not affect the redemption of any
other Series A Preferred Stock. Each notice of redemption will set forth
the applicable redemption date, the redemption price, the place where shares of
Series A Preferred Stock are to be redeemed, and the number of shares of Series A
Preferred Stock to be redeemed (and, if less than all shares of Series A
Preferred Stock held by the applicable holder, the number of shares to be
redeemed from the holder).
Shares of Series A
Preferred Stock that are redeemed, repurchased or otherwise acquired by us will
revert to authorized but unissued shares of our preferred stock.
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Liquidation Rights
In the event that we
voluntarily or involuntarily liquidate, dissolve or wind up our affairs,
holders of Series A Preferred Stock will be entitled to receive an amount
per share, referred to as the total liquidation amount, equal to the fixed
liquidation preference of $1,000 per share, plus any accrued and unpaid
dividends, whether or not declared, to the date of payment. Holders of the Series A
Preferred Stock will be entitled to receive the total liquidation amount out of
our assets that are available for distribution to shareholders, after payment
or provision for payment of our debts and other liabilities but before any
distribution of assets is made to holders of our common stock or any other
shares ranking, as to that distribution, junior to the Series A Preferred
Stock.
If our assets are not
sufficient to pay the total liquidation amount in full to all holders of Series A
Preferred Stock and all holders of any shares of outstanding parity stock, the
amounts paid to the holders of Series A Preferred Stock and other shares
of parity stock will be paid
pro rata
in
accordance with the respective total liquidation amount for those holders. If
the total liquidation amount per share of Series A Preferred Stock has been
paid in full to all holders of Series A Preferred Stock and other shares
of parity stock, the holders of our common stock or any other shares ranking,
as to such distribution, junior to the Series A Preferred Stock will be
entitled to receive all of our remaining assets according to their respective
rights and preferences.
For purposes of the
liquidation rights, neither the sale, conveyance, exchange or transfer of all
or substantially all of our property and assets, nor the consolidation or
merger by us with or into any other corporation or by another corporation with
or into us, will constitute a liquidation, dissolution or winding-up of our
affairs.
Voting Rights
Except as indicated below
or otherwise required by law, the holders of Series A Preferred Stock will
not have any voting rights.
Election of Two Directors upon Non-Payment of Dividends
.
If the dividends on the Series A Preferred Stock have not been paid for an
aggregate of six quarterly dividend periods or more (whether or not
consecutive), the authorized number of directors then constituting our board of
directors will be increased by two. Holders of Series A Preferred Stock,
together with the holders of any outstanding parity stock with like voting
rights, referred to as voting parity stock, voting as a single class, will be
entitled to elect the two additional members of our board of directors,
referred to as the preferred stock directors, at the next annual meeting (or at
a special meeting called for the purpose of electing the preferred stock
directors prior to the next annual meeting) and at each subsequent annual
meeting until all accrued and unpaid dividends for all past dividend periods
have been paid in full. The election of any preferred stock director is subject
to the qualification that the election would not cause us to violate the
corporate governance requirement of the NASDAQ Global Select Market (or any
other exchange on which our securities may be listed) that listed companies
must have a majority of independent directors.
Upon the termination of
the right of the holders of Series A Preferred Stock and voting parity
stock to vote for preferred stock directors, as described above, the preferred
stock directors will immediately cease to be qualified as directors, their term
of office shall terminate immediately and the number of authorized directors of
BancorpRI will be reduced by the number of preferred stock directors that the
holders of Series A Preferred Stock and voting parity stock had been
entitled to elect. The holders of a majority of shares of Series A
Preferred Stock and voting parity stock, voting as a class, may remove any
preferred stock director, with or without cause, and the holders of a majority
of the shares of Series A Preferred Stock and voting parity stock, voting
as a class, may fill any vacancy created by the removal of a preferred stock
director. If the office of a preferred stock director becomes vacant for any
other reason, the remaining preferred stock director may choose a successor to
fill such vacancy for the remainder of the unexpired term.
Other Voting Rights
. So long as any
shares of Series A Preferred Stock are outstanding, in addition to any
other vote or consent of shareholders required by law or by our Articles of
Incorporation or Certificate of Designations, the vote or consent of the
holders of at least 66
2
/3% of
the shares of Series A Preferred Stock at the time outstanding, voting
separately as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be
necessary for effecting or validating:
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·
any
amendment or alteration of our Articles of Incorporation or Certificate of
Designations to authorize or create or increase the authorized amount of, or
any issuance of, any shares of, or any securities convertible into or
exchangeable or exercisable for shares of, any class or series of capital stock
ranking senior to the Series A Preferred Stock with respect to payment of
dividends and/or distribution of assets on any liquidation, dissolution or
winding up of BancorpRI;
·
any
amendment, alteration or repeal of any provision of the Certificate of
Designations so as to adversely affect the rights, preferences, privileges or
voting powers of the Series A Preferred Stock; or
·
any consummation of a binding share
exchange or reclassification involving the Series A Preferred Stock or of
a merger or consolidation of BancorpRI with another entity, unless the shares
of Series A Preferred Stock remain outstanding following any such
transaction or, if BancorpRI is not the surviving entity, are converted into or
exchanged for preference securities and such remaining outstanding shares of Series A
Preferred Stock or preference securities have rights, references, privileges
and voting powers that are not materially less favorable than the rights,
preferences, privileges or voting powers of the Series A Preferred Stock,
taken as a whole.
To the extent of the
voting rights of the Series A Preferred Stock, each holder of Series A
Preferred Stock will have one vote for each $1,000 of liquidation preference to
which such holders shares of Series A Preferred Stock are entitled.
The foregoing voting
provisions will not apply if, at or prior to the time when the vote or consent
would otherwise be required, all outstanding shares of Series A Preferred
Stock have been redeemed or called for redemption upon proper notice and
sufficient funds have been set aside by us for the benefit of the holders of Series A
Preferred Stock to effect the redemption.
DESCRIPTION OF WARRANT TO PURCHASE
COMMON STOCK
The following is a brief
description of the terms of the Warrant that may be resold by the selling
securityholders. This summary does not purport to be complete in all respects.
This description is subject to and qualified in its entirety by reference to
the Warrant, a copy of which has been filed with the SEC and is also available
upon request from us.
Shares of Common Stock Subject to the Warrant
The Warrant is initially
exercisable for 192,967 shares of our common stock. If we complete one or more
qualified equity offerings on or prior to December 31, 2009 that result in
our receipt of aggregate gross proceeds of not less than the issue price of the
Series A Preferred Stock sold to the Treasury Department and the Treasury
Department is still the holder of the Warrant, which is equal to 100% of the
aggregate liquidation preference of the Series A Preferred Stock, the
number of shares of common stock underlying the Warrant then held by the
selling securityholders will be reduced by 50% to 96,482 shares. The number of
shares subject to the Warrant are subject to further adjustments described
below under the heading Adjustments to the Warrant.
Exercise of the Warrant
The initial exercise
price applicable to the Warrant is $23.32 per share of common stock for which
the Warrant may be exercised. The Warrant may be exercised at any time on or
before December 19, 2018 by surrender of the Warrant and a completed
notice of exercise attached as an annex to the Warrant and the payment of the
exercise price for the shares of common stock for which the Warrant is being
exercised. The exercise price may be paid either by the withholding by
BancorpRI of such number of shares of common stock issuable upon exercise of
the Warrant equal to the value of the aggregate exercise price of the Warrant
determined by reference to the market price of our common stock on the trading
day on which the Warrant is exercised or, if agreed to by us and the
warrantholder, by the payment of cash equal to the aggregate exercise price.
The exercise price applicable to the Warrant is subject to the further
adjustments described below under the heading Adjustments to the Warrant.
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Upon exercise of the
Warrant, certificates for the shares of common stock issuable upon exercise
will be issued to the warrantholder. We will not issue fractional shares upon
any exercise of the Warrant. Instead, the warrantholder will be entitled to a
cash payment equal to the market price of our common stock on the last day
preceding the exercise of the Warrant (less the pro-rated exercise price of the
Warrant) for any fractional shares that would have otherwise been issuable upon
exercise of the Warrant. We will at all times reserve the aggregate number of
shares of our common stock for which the Warrant may be exercised.
Rights as a Shareholder
The warrantholder shall
have no rights or privileges of the holders of our common stock, including any
voting rights, until (and then only to the extent) the Warrant has been
exercised.
Transferability
The initial selling
securityholder may not transfer a portion of the Warrant with respect to more
than 96,482 shares of common stock until the earlier of the date on which
BancorpRI has received aggregate gross proceeds from a qualified equity
offering of at least the issue price of the Series A Preferred Stock and December 31,
2009. The Warrant, and all rights under the Warrant, are otherwise
transferable.
Adjustments to the Warrant
Adjustments in Connection with Stock Splits, Subdivisions,
Reclassifications and Combinations
. The number of shares
for which the Warrant may be exercised and the exercise price applicable to the
Warrant will be proportionately adjusted in the event we pay dividends or make
distributions of our common stock, subdivide, combine or reclassify outstanding
shares of our common stock.
Anti-dilution Adjustment
. Until the
earlier of December 19, 2011 and the date the initial selling
securityholder no longer holds the Warrant (and other than in certain permitted
transactions described below), if we issue any shares of common stock (or
securities convertible or exercisable into common stock) for less than 90% of
the market price of the common stock on the last trading day prior to pricing
such shares, then the number of shares of common stock into which the Warrant
is exercisable and the exercise price will be adjusted. Permitted transactions
include issuances:
·
as consideration for or to fund
the acquisition of businesses and/or related assets;
·
in connection with employee
benefit plans and compensation related arrangements in the ordinary course and
consistent with past practice approved by our board of directors;
·
in connection with public or
broadly marketed offerings and sales of common stock or convertible securities
for cash conducted by us or our affiliates pursuant to registration under the
Securities Act, or Rule 144A thereunder on a basis consistent with
capital-raising transactions by comparable financial institutions (but do not
include other private transactions); and
·
in connection with the exercise
of preemptive rights on terms existing as of December 19, 2008.
Other Distributions
.
If we declare any dividends or
distributions other than our historical, ordinary cash dividends, the exercise
price of the Warrant will be adjusted to reflect such distribution.
Certain Repurchases
.
If we effect a
pro rata
repurchase of common stock both
the number of shares issuable upon exercise of the Warrant and the exercise
price will be adjusted.
Business Combinations
. In the event of
a merger, consolidation or similar transaction involving BancorpRI and
requiring shareholder approval, the warrantholders right to receive shares of
our common stock upon exercise of the Warrant shall be converted into the right
to exercise the Warrant for the consideration that would have been payable to
the warrantholder with respect to the shares of common stock for which the
Warrant may be exercised, as if the Warrant had been exercised immediately
prior to such merger, consolidation or similar transaction.
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DESCRIPTION OF COMMON STOCK
The following is a brief
description of our common stock. This summary does not purport to be complete
in all respects. This description is subject to and qualified in its entirety
by reference to our Articles of Incorporation, as amended, a copy of which has
been filed with the SEC and which is also available upon request from us.
General
We have 11,000,000 shares
of authorized common stock, $.01 par value per share, of which 4,569,704 shares
(net of treasury stock) were outstanding as of December 31, 2008.
Holders of our common
stock are entitled to one vote for each share that they hold for the election
of directors and on all matters to be submitted to a vote of the shareholders
and have no pre-emptive rights. Shares of our common stock are not redeemable
or convertible.
Holders of our common
stock are entitled to receive dividends and other distributions if, as and when
declared by our board of directors out of any funds legally available for
dividends. Upon our liquidation or dissolution, holders of our common stock are
also entitled to receive
pro rata
our
net assets, if any, remaining after payment of all our creditors and preferred
liquidation payments to holders of our Series A Preferred Stock and any
other outstanding class or series of preferred stock.
Our Series A
Preferred Stock has, and any other series of preferred stock upon issuance will
have, preference over our common stock with respect to the payment of dividends
and the distribution of assets in the event of our liquidation or dissolution.
Our preferred stock also has such other preferences as currently, or as may be,
fixed by our board of directors.
Our common stock is
listed on the NASDAQ Global Select Market. Outstanding shares of our common
stock are validly issued, fully paid and non-assessable. Holders of our common
stock are not, and will not be, subject to any liability as shareholders.
Transfer Agent and Registrar
The transfer agent and
registrar for our common stock is Registrar and Transfer Company.
PLAN OF DISTRIBUTION
The selling
securityholders and their successors, including their transferees, may sell the
Securities directly to purchasers or through underwriters, broker-dealers or
agents, who may receive compensation in the form of discounts, concessions or
commissions from the selling securityholders or the purchasers of the
Securities. These discounts, concessions or commissions as to any particular
underwriter, broker-dealer or agent may be in excess of those customary in the
types of transactions involved.
The Securities may be
sold in one or more transactions at fixed prices, at prevailing market prices
at the time of sale, at varying prices determined at the time of sale or at
negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions:
·
|
on any national
securities exchange or quotation service on which the Series A Preferred
Stock or the common stock may be listed or quoted at the time of sale,
including, as of the date of this prospectus, the NASDAQ Global Select Market
in the case of the common stock;
|
|
|
·
|
in the over-the-counter
market;
|
|
|
·
|
in transactions
otherwise than on these exchanges or services or in the over-the-counter
market; or
|
|
|
·
|
through the writing of
options, whether the options are listed on an options exchange or otherwise.
|
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In addition, any
Securities that qualify for sale pursuant to Rule 144 under the Securities
Act may be sold under Rule 144 rather than pursuant to this prospectus.
In connection with the
sale of the Securities or otherwise, the selling securityholders may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the common stock issuable upon exercise of the Warrant in the course
of hedging the positions they assume. The selling securityholders may also sell
short the common stock issuable upon exercise of the Warrant and deliver common
stock to close out short positions, or loan or pledge the Series A
Preferred Stock or the common stock issuable upon exercise of the Warrant to
broker-dealers that in turn may sell the Securities.
The aggregate proceeds to
the selling securityholders from the sale of the Securities will be the
purchase price of the Securities less discounts and commissions, if any.
In effecting sales,
broker-dealers or agents engaged by the selling securityholders may arrange for
other broker-dealers to participate. Broker-dealers or agents may receive
commissions, discounts or concessions from the selling securityholders in
amounts to be negotiated immediately prior to the sale.
In offering the
Securities covered by this prospectus, the selling securityholders and any
broker-dealers who execute sales for the selling securityholders may be deemed
to be underwriters within the meaning of Section 2(a)(11) of the
Securities Act in connection with such sales. Any profits realized by the
selling securityholders and the compensation of any broker-dealer may be deemed
to be underwriting discounts and commissions. Selling securityholders who are underwriters
within the meaning of Section 2(a)(11) of the Securities Act will be subject to
the prospectus delivery requirements of the Securities Act and may be subject
to certain statutory and regulatory liabilities, including liabilities imposed
pursuant to Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Securities Exchange Act of 1934, or the Exchange Act.
In order to comply with
the securities laws of certain states, if applicable, the Securities must be
sold in such jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the Securities may not be sold unless
they have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and
is complied with.
The anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of the Securities
pursuant to this prospectus and to the activities of the selling
securityholders. In addition, we will make copies of this prospectus available
to the selling securityholders for the purpose of satisfying the prospectus
delivery requirements of the Securities Act, which may include delivery through
the facilities of the NASDAQ Global Select Market pursuant to Rule 153
under the Securities Act.
At the time a particular
offer of securities is made, if required, a prospectus supplement will set
forth the number and type of securities being offered and the terms of the
offering, including the name of any underwriter, dealer or agent, the purchase
price paid by any underwriter, any discount, commission and other item
constituting compensation, any discount, commission or concession allowed or
reallowed or paid to any dealer, and the proposed selling price to the public.
We do not intend to apply
for listing of the Series A Preferred Stock on any securities exchange or
for inclusion of the Series A Preferred Stock in any automated quotation
system unless requested by the initial selling shareholder. No assurance can be
given as to the liquidity of the trading market, if any, for the Series A
Preferred Stock.
We have agreed to
indemnify the selling securityholders against certain liabilities, including
certain liabilities under the Securities Act. We have also agreed, among other
things, to bear substantially all expenses (other than underwriting discounts
and selling commissions) in connection with the registration and sale of the
Securities covered by this prospectus.
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SELLING SECURITYHOLDERS
On December 19,
2008, we issued the Securities covered by this prospectus to the United States
Department of Treasury, which is the initial selling securityholder under this
prospectus, in a transaction exempt from the registration requirements of the
Securities Act. The initial selling securityholder, or its successors,
including transferees, may from time to time offer and sell, pursuant to this
prospectus or a supplement to this prospectus, any or all of the Securities
they own. The Securities to be offered under this prospectus for the account of
the selling securityholders are:
·
|
30,000 shares of our
Series A Preferred Stock, representing beneficial ownership of 100% of
our Series A Preferred Stock outstanding on the date of this prospectus;
|
|
|
·
|
a Warrant to purchase
192,967 shares of our common stock, representing beneficial ownership of
approximately 4.2% of our common stock as of December 31, 2008; and
|
|
|
·
|
192,967 shares of our
common stock issuable upon exercise of the Warrant, which shares, if issued,
would represent ownership of approximately 4.2% of our common stock as of
December 31, 2008.
|
For purposes of this
prospectus, we have assumed that, after completion of the offering, none of the
Securities covered by this prospectus will be held by the selling
securityholders.
Beneficial ownership is
determined in accordance with the rules of the SEC and includes voting or
investment power with respect to the Securities. To our knowledge, the initial
selling securityholder has sole voting and investment power with respect to the
Securities.
We do not know when or in
what amounts the selling securityholders may offer the Securities for sale. The
selling securityholders might not sell any or all of the Securities offered by
this prospectus. Because the selling securityholders may offer all or some of
the Securities pursuant to this offering, and because currently no sale of any
of the Securities is subject to any agreements, arrangements or understandings,
we cannot estimate the number of the Securities that will be held by the
selling securityholders after completion of the offering.
Other than with respect
to the acquisition of the Securities, the initial selling securityholder has
not had a material relationship with us.
Information about the
selling securityholders may change over time and changed information will be
set forth in supplements to this prospectus if and when necessary.
LEGAL MATTERS
The law firm of Hinckley,
Allen & Snyder LLP will pass on the validity the Series A
Preferred Stock, the Warrant and the common stock offered hereby.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
consolidated financial statements incorporated in this prospectus by reference
from our Annual Report on Form 10-K as of December 31, 2007 and 2006
and for each of the years in the three-year period ended December 31, 2007
and managements assessment of the effectiveness of internal control over
financial reporting as of December 31, 2007 have been incorporated herein
by reference in reliance upon the reports of KPMG LLP, an independent
registered public accounting firm, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We
file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read
and copy any document we file with the SEC at the SECs public reference room,
100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for more information on its public
reference
12
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room. Our SEC
filings are also available to you on the SECs Internet website at
http://www.sec.gov. We make available
free of charge through our website at http://www.bankri.com all reports we
electronically file with, or furnish to, the SEC, including our Annual Report
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K,
as well as any amendments to those reports, as soon as reasonably practicable
after those documents are filed with, or furnished to, the SEC.
This
prospectus is part of a registration statement that we filed with the SEC. The registration statement contains more
information than this prospectus regarding us and our common stock, including
certain exhibits and schedules, as permitted by the rules and regulations
of the SEC. As a result, statements made
in this prospectus as to the contents of any contract or other document are not
necessarily complete. You should read the
full text of any contract or document filed as a schedule or exhibit to the
registration statement for a more complete understanding of the contract or
document involved. You can obtain a copy
of the registration statement from the SEC at the address listed above or from
the SECs Internet website.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference the
information we file with it, which means that we can disclose important
information to you by referring you to those documents that we have previously
filed with the SEC or documents that we will file with the SEC in the
future. The information incorporated by
reference is considered to be part of this prospectus, and later information
that we file with the SEC will automatically update and supersede this
information. This prospectus
incorporates by reference the following documents set forth below that we have
previously filed with the SEC:
(1)
Our Annual Report on Form 10-K
for the year ended December 31, 2007;
(2)
Our Quarterly Reports
on Form 10-Q for the quarters ended March 31, 2008, June 30,
2008 and September 30, 2008;
(3)
Our Current Report on
Form 8-K dated February 3, 2009.
(4)
Our Current Report on
Form 8-K dated January 30, 2009
(5)
Our Current Report on
Form 8-K dated January 29, 2009
(6)
Our Current Report on
Form 8-K dated January 13, 2009
(7)
Our Current Report on Form 8-K
dated December 22, 2008;
(8)
Our Current Report on Form 8-K
dated December 3, 2008;
(9)
Our Current Report on Form 8-K
dated November 17, 2008;
(10)
Our definitive Proxy
Statement filed on April 3, 2008 in connection with our annual meeting of
shareholders held on May 21, 2008;
(11)
The description of our
common stock contained in our Registration Statement filed under Section 12
of the Exchange Act on Form 8-A, including all amendments or reports filed
for the purpose of updating such description; and
(12)
Our Registration
Statement on Form S-4, SEC File No. 333-33182.
All
documents filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act after the initial filing of the registration statement that
contains this prospectus and prior to the date of the termination of the
offering of the common stock offered hereby shall be deemed to be incorporated
by reference into this registration statement and to be a part hereof from the
date of filing of such documents. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained herein
or in any document which is or is deemed to be incorporated by reference herein
modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this prospectus.
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We will provide without
charge to each person to whom a prospectus is delivered, upon written or oral
request of any such person, a copy of any or all of the foregoing documents
incorporated herein by reference (other than exhibits to such documents). Written requests should be directed to Chief
Financial Officer, Bank Rhode Island, One Turks Head Place, Providence, Rhode
Island 02903. Telephone requests may be
directed to (401) 456-5000.
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No person has been authorized to
give any information or to make any representation other than as contained in
this prospectus and, if given or made, such other information or representation
must not be relied upon as having been authorized by Bancorp Rhode Island, Inc. This prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any of the Securities offered
hereby to any person in any jurisdiction in which such offer or solicitation is
not authorized or in which the person making such offer or solicitation is not
qualified to do so, or to any person to whom it is unlawful to make such offer
or solicitation in such jurisdiction.
Neither the delivery of this prospectus nor any sale hereunder shall
under any circumstances create any implication that there has been no change in
the affairs of Bancorp Rhode Island, Inc. since any of the dates as of
which information is furnished herein or since the date hereof.
Fixed Rate Cumulative Perpetual Preferred Stock, Series A
Warrant to Purchase 192,967 shares of common stock
192,967 shares of common stock
PROSPECTUS
February
11, 2009
The Securities are not deposits
or savings accounts or obligations of any bank and are not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
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