The information in this preliminary
prospectus supplement is not complete and may be changed. A registration statement relating to the securities to be sold by the issuer
has become effective under the Securities Act of 1933, as amended. This preliminary prospectus supplement and the accompanying base prospectus
do not constitute an offer to sell these securities and are not soliciting an offer to buy these securities in any jurisdiction where
the offer or sale is not permitted.
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-237301
SUBJECT
TO COMPLETION, DATED JUNE 28, 2022
PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus dated March 20, 2020)
$
![](https://content.edgar-online.com/edgar_conv_img/2022/06/28/0001104659-22-075042_tm2219164d1_logo.jpg)
%
Fixed-to-Floating Rate Subordinated Notes due 2032
We are offering $ aggregate
principal amount of % fixed-to-floating rate subordinated notes due 2032 (the “Notes”) pursuant
to this prospectus supplement and the accompanying prospectus. The Notes will be offered in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The Notes will mature on
, 2032 (the “Maturity Date”). From and including the date of original issuance to, but excluding,
, 2027 or the date of earlier redemption (the “fixed rate period”), the
Notes will bear interest at an initial rate of % per annum, payable semi-annually in arrears on
and
of each year, commencing on
, 2022. The last interest payment date for the fixed rate period will be
, 2027. From and including
, 2027 to, but excluding, the Maturity Date or the date of earlier redemption (the
“floating rate period”), the Notes will bear interest at a floating rate per annum equal to the Benchmark rate (which is expected
to be Three-Month Term SOFR), each as defined and subject to the provisions described under “Description of the Notes — Interest”
in this prospectus supplement, plus basis
points, payable quarterly in arrears on ,
, and of each
year, commencing on , 2027.
Notwithstanding the foregoing, if the Benchmark rate is less than zero, the Benchmark rate will be deemed to be zero.
We may, at our option, beginning with the interest payment date of
, 2027 and on any interest payment date thereafter, redeem the Notes, in whole or in
part. The Notes will not otherwise be redeemable by us prior to maturity, unless certain events occur, as described under “Description
of the Notes — Redemption” in this prospectus supplement. The redemption price for any redemption is 100% of
the principal amount of the Notes being redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption.
Any redemption of the Notes will be subject to the receipt of the approval of the Board of Governors of the Federal Reserve System (the
“Federal Reserve”) to the extent then required under applicable laws or regulations, including capital regulations.
The Notes will be unsecured subordinated obligations, will rank pari passu,
or equally, with all of our existing and future unsecured subordinated debt, will rank senior to all of our existing and future junior
subordinated debt and will rank junior to all of our existing and future senior debt. The Notes will be structurally subordinated to all
existing and future liabilities of our subsidiaries and will be effectively subordinated to our existing and future secured indebtedness.
There will be no sinking fund for the Notes. The Notes will be obligations of Berkshire Hills Bancorp, Inc. (“BHLB”)
only and will not be obligations of, and will not be guaranteed by, any of BHLB’s subsidiaries. For a more detailed description
of the Notes, see “Description of the Notes.”
Prior to this offering, there has been no public market for the Notes.
The Notes will not be listed on any securities exchange or included in any automated quotation system.
The Notes are not a savings account, deposit or other obligation
of Berkshire Bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation (the “FDIC”) or any other
governmental agency. The Notes are ineligible as collateral for a loan or extension of credit from BHLB or any of its subsidiaries. None
of the U.S. Securities and Exchange Commission (the “SEC”), the FDIC, the Federal Reserve, the Massachusetts Commissioner
of Banks or any other bank regulatory agency or any state securities commission has approved or disapproved of the Notes or passed upon
the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal
offense.
Investing
in the Notes involves risks. See “Risk Factors” beginning on page S-10 of this prospectus supplement
and those risk factors in the documents incorporated by reference in this prospectus supplement and the accompanying prospectus.
| |
Per Note | | |
Total | |
Public offering price(1) | |
| % | | |
$ | | |
Underwriting discount(2) | |
| % | | |
$ | | |
Proceeds, before expenses, to us | |
| % | | |
$ | | |
(1) Plus accrued interest, if any, from the original issue date.
(2) See “Underwriting” in this prospectus supplement
for details regarding the underwriters’ compensation.
The underwriters expect to deliver the Notes to purchasers in book-entry
form through the facilities of The Depository Trust Company, against payment on or about
, 2022. See “Underwriting” in this prospectus supplement for details.
Joint Bookrunning Managers
​ |
Keefe,
Bruyette & Woods
A Stifel
Company |
|
|
PNC
FIG Advisory,
part of PNC Capital Markets LLC |
​ |
The date of this prospectus supplement is
, 2022.
TABLE
OF CONTENTS
PROSPECTUS
SUPPLEMENT
PROSPECTUS
ABOUT
THIS PROSPECTUS SUPPLEMENT
Unless the context indicates otherwise, the terms
“BHLB,” the “Company,” “we,” “our” and “us” in this prospectus supplement
and the accompanying prospectus refer to Berkshire Hills Bancorp, Inc. and its subsidiaries.
References to the “Bank” refer to Berkshire
Hills Bank. References to a particular year mean our fiscal year commencing on January 1 and ending on December 31 of that year.
This prospectus supplement and the accompanying
prospectus are part of a shelf registration statement that we filed with the SEC. The registration statement incorporates by reference
important business and financial information about us that is not included in or delivered with this document. This information, other
than exhibits to documents that are not specifically incorporated by reference into this prospectus supplement or the accompanying prospectus,
is available to you without charge via the SEC’s website at www.sec.gov or upon written or oral request to BHLB at the address or
telephone number indicated in the section entitled “Incorporation of Certain Documents by Reference” in this prospectus supplement.
This document contains two parts. The first part
is this prospectus supplement, which contains specific information about us and the terms on which we are selling the Notes and adds to
and updates information contained in the accompanying prospectus and the documents incorporated by reference herein. The second part is
the accompanying prospectus dated March 20, 2020, which contains and incorporates by reference a more general description of the
securities we may offer from time to time, some of which does not apply to the Notes we are offering, and important business and financial
information about us. If information contained in this prospectus supplement differs or varies from the information contained in the accompanying
prospectus, you should rely on the information set forth in this prospectus supplement.
Neither we nor the underwriters have authorized
anyone to provide you with any information other than that contained or incorporated by reference in this prospectus supplement, the accompanying
prospectus and any “free writing prospectus” prepared by or on behalf of us or to which we may have referred you. We take
no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are not,
and the underwriters are not, making an offer to sell the Notes in any jurisdiction where the offer or sale is not permitted. You should
assume that the information appearing in this prospectus supplement, the accompanying prospectus, any free writing prospectus relating
to this prospectus supplement provided or approved by us and the documents incorporated by reference in either this prospectus supplement
or the accompanying prospectus is accurate only as of the respective dates of those documents. Our business, financial condition, results
of operations and prospects may have changed since those dates.
Before you invest in the Notes, you should carefully
read the registration statement (including the exhibits thereto) of which this prospectus supplement and the accompanying prospectus form
a part, this prospectus supplement, the accompanying prospectus and the documents incorporated by reference into this prospectus supplement
and the accompanying prospectus. The incorporated documents are described under “Incorporation of Certain Documents by Reference.”
EXTENDED
SETTLEMENT
We expect that delivery of the Notes will be made
against payment therefor on or about , 2022, which will be the
business day following the date of pricing of the Notes, or “T+ .” Under
Rule 15c6-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), trades in the secondary market generally
are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who
wish to trade the Notes prior to the delivery of the Notes will be required, by virtue of the fact that the Notes initially settle in
T+ , to specify an alternate settlement arrangement at the time of any such trade to prevent
a failed settlement. Purchasers of the Notes who wish to trade the Notes prior to their date of delivery hereunder should consult their
advisors.
WHERE
YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. Our reports filed electronically with the SEC are available to the public over the
Internet at the SEC’s website at www.sec.gov.
We also maintain an Internet site where you can
find additional information about us, including our SEC filings. The address of our Internet site is www.berkshirebank.com.
All Internet addresses provided in this prospectus supplement or in the accompanying prospectus are for informational purposes only and
are not intended to be hyperlinks. In addition, the information on our Internet website, or any other Internet site described in this
prospectus supplement or in the accompanying prospectus, is not a part of, and is not incorporated or deemed to be incorporated by reference
in, this prospectus supplement or in the accompanying prospectus or other offering materials.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference”
much of the information that we file with it, which means that we can disclose important information to you by referring you to those
publicly available documents. The information that we incorporate by reference is an important part of this prospectus supplement and
the accompanying prospectus. Any statement contained in a document incorporated or deemed to be incorporated by reference into this prospectus
supplement or the accompanying prospectus will be deemed to be modified or superseded for purposes of this prospectus supplement or the
accompanying prospectus to the extent that a statement contained in this prospectus supplement or the accompanying prospectus or any other
subsequently filed document that is deemed to be incorporated by reference into this prospectus supplement or the accompanying prospectus
modifies or supersedes the statement. In other words, in the case of a conflict or inconsistency between information contained in this
prospectus supplement and the accompanying prospectus and information incorporated by reference into this prospectus, you should rely
on the information contained in the document that was filed later. Any statement so modified or superseded will not be deemed, except
as so modified or superseded, to constitute a part of this prospectus supplement or the accompanying prospectus.
This prospectus supplement and the accompanying
prospectus incorporate by reference the documents listed below and all documents we subsequently file with the SEC pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act, prior to the termination of the offering of the Notes described in this prospectus supplement; provided, however,
that we are not incorporating by reference any documents, portions of documents or other information deemed to have been “furnished”
and not “filed” with the SEC:
| • | our Current Reports on Form 8-K filed with the SEC on January 19, 2022, January 28, 2022, February 7, 2022, March 14, 2022, March 28, 2022, April 12, 2022, April 22, 2022, April 29, 2022 and May 20, 2022; and |
| • | the description of our common stock set forth in Exhibit 4.3 to our Annual Report on Form 10-K for the year ended December 31,
2021, including any other amendment or reports filed for the purpose of updating such description. |
Upon
request, we will provide to each person, including any beneficial owner, to whom a copy of this prospectus supplement is delivered, a
copy of any or all of the information that has been incorporated by reference in this prospectus supplement but not delivered with this
prospectus supplement (other than the exhibits to such documents which are not specifically incorporated by reference therein). We will
provide this information at no cost to the requester upon written or oral request to Berkshire Hills Bancorp, Inc., Attn: Corporate
Secretary, 60 State Street, Boston, Massachusetts, 02109; Tel.: (800) 773-5601, ext. 133773.
You should rely only on the information incorporated
by reference or set forth in this prospectus supplement and the accompanying prospectus or in any free writing prospectus prepared by
or on behalf of us or to which we have referred you. Neither we nor any underwriters, dealers or agents have authorized anyone else to
provide you with additional or different information.
CAUTIONARY
NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus
and the documents incorporated by reference or deemed incorporated by reference into this prospectus supplement or the accompanying prospectus
and any other written or oral statements made by us from time to time may contain “forward-looking statements” within the
meaning of the federal securities laws. Words such as “may,” “will,” “should,” “could,”
“would,” “outlook,” “plan,” “potential,” “estimate,” “project,”
“believe,” “intend,” “anticipate,” “expect,” “target” and variations of such
similar expressions are intended to identify such forward-looking statements. Examples of forward-looking statements include, but are
not limited to, possible or assumed estimates with respect to the financial condition of BHLB, our expected or anticipated revenue, and
our results of operations and our business, including earnings growth; revenue growth in retail banking, lending and other areas; loan
origination volumes; current and future capital management programs; non-interest income levels; tangible capital generation; market share;
expense levels; stock repurchases; and other business operations and strategies, as well as statements regarding the impact of the ongoing
COVID-19 pandemic, and any current or future variants thereof; inflation and interest rates; economic activity; geopolitical conflicts;
and market conditions.
All forward-looking statements are subject to risks,
uncertainties and other factors, many of which are beyond our control, that may cause the actual results, performance or achievements
of BHLB to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others:
| • | there may be increases in competitive pressure among financial institutions or from non-financial institutions; |
| • | the net interest margin is subject to material short-term fluctuation based upon market rates; |
| • | changes in deposit flows, loan demand or real estate values may affect the business of the Bank; |
| • | changes in accounting principles, policies or guidelines may cause the Company’s financial condition to be perceived differently; |
| • | changes in corporate and/or individual income tax laws may adversely affect the Company’s business or financial condition or
results of operations; |
| • | general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions
in the securities markets or the banking industry, may be different than the Company currently anticipates; |
| • | legislative, regulatory or policy changes may adversely affect the Company’s business or results of operations; |
| • | technological changes may be more difficult or expensive than the Company anticipates; |
| • | success or consummation of new business initiatives or the integration of any acquired entities may be more difficult or expensive
than the Company anticipates; and |
| • | litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence
or non-occurrence of events longer than the Company anticipates. |
Further, the ongoing COVID-19 pandemic (including
any current or future variants of the COVID-19 virus) and the related local and national economic disruption may continue to result in
a decline in demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; an increase
in our allowance for loan losses; a decline in the value of loan collateral, including real estate; a greater decline in the yield on
our interest-earning assets than the decline in the cost of our interest-bearing liabilities; and increased cybersecurity risks, as employees
continue to work remotely. Additionally, financial markets or Company operations may be adversely affected by the current or anticipated
impact of military conflict, including the conflict between Russia and Ukraine, terrorism or other geopolitical events.
These and other factors that may affect forward-looking
statements are more fully described under “Risk Factors” in Item 1A of our most recent Annual Report on Form 10-K
for the fiscal year ended December 31, 2021, filed with the SEC on March 1, 2022, and other factors discussed in the filings
we make with the SEC under the Exchange Act.
All forward-looking statements attributable to
our Company are expressly qualified in their entirety by these cautionary statements. Forward-looking statements speak only as of the
date on which such statements are made. Except as required by law, we disclaim any obligation to update these forward-looking statements,
whether as a result of new information, future events or otherwise. There is no assurance that future results, levels of activity, performance
or goals will be achieved. Accordingly, you should not place undue reliance on forward-looking statements.
PROSPECTUS
SUPPLEMENT SUMMARY
This summary highlights selected information
from this prospectus supplement and does not contain all of the information that you should consider in making your investment decision.
You should read this summary together with the more detailed information appearing elsewhere in this prospectus supplement, as well as
the information in the accompanying prospectus and in the documents incorporated by reference or deemed incorporated by reference into
this prospectus supplement and the accompanying prospectus. You should carefully consider, among other things, the matters discussed in
the section titled “Risk Factors” in this prospectus supplement and in our most recent Annual Report on Form 10-K for
the year ended December 31, 2021 and in other documents that we subsequently file with the SEC. In addition, certain statements
include forward-looking information that involves risks and uncertainties. See “Cautionary Note Concerning Forward-Looking Statements”
in this prospectus supplement.
Overview
BHLB is headquartered in Boston, Massachusetts.
BHLB is a Delaware corporation and the bank holding company for the Bank. BHLB has elected financial holding company status within the
meaning of the Bank Holding Company Act of 1956, as amended. The Bank operates as a commercial bank under a Massachusetts trust
company charter. The Bank owns Firestone Financial, LLC, which is a Massachusetts limited liability company that originates equipment
loans, as well as consolidated subsidiaries operated as Massachusetts securities corporations and other subsidiary entities. BHLB also
owns all of the common stock of two Delaware statutory business trusts, Berkshire Hills Capital Trust I and SI Capital Trust II. The
capital trusts are unconsolidated and their only material assets are trust preferred securities related to BHLB’s junior subordinated
debentures.
The Bank’s goal is to be a high-performing, leading
socially responsible community bank in New England, Upstate New York and beyond. The Bank provides business and consumer banking, mortgage,
wealth management, and investment services.
At March 31, 2022, the Bank had 105 full-service banking offices in its New England and
New York footprint. During 2021, BHLB opened a commercial banking office in each of New Haven, Connecticut and Providence, Rhode
Island. During 2021, BHLB sold its 8 Mid-Atlantic banking offices and related operations. Also during the year, the Bank consolidated
16 branch offices in its New England and New York footprint and sold its insurance operations.
BHLB’s common stock is listed on the New
York Stock Exchange under the ticker “BHLB.”
Corporate Information
Our executive offices are located at 60 State Street,
Boston, Massachusetts, 02109. Our telephone number at this address is (800) 773-5601, ext. 133773 and our website is www.berkshirebank.com.
The information on our website is not part of this prospectus supplement.
THE
OFFERING
The following summary highlights selected information
from this prospectus supplement and the accompanying prospectus about the Notes and this offering. This description is not complete and
does not contain all of the information that you should consider before investing in the Notes. You should read this prospectus supplement
and the accompanying prospectus, as well as the documents incorporated by reference herein and therein, carefully before making a decision
about whether to invest in the Notes. For a more complete understanding of the Notes, you should read the section of this prospectus supplement
entitled “Description of the Notes.”
Issuer |
Berkshire Hills Bancorp, Inc., a Delaware corporation and a bank holding company. |
|
|
Notes Offered |
% Fixed-to-Floating Rate Subordinated Notes due 2032 |
|
|
Aggregate Principal Amount |
$ |
|
|
Issue Price |
% |
|
|
Maturity Date |
The Notes will mature on , 2032. |
|
|
Interest |
Fixed
rate period: A fixed rate per annum of %.
Floating
rate period: A floating per annum rate equal to the Benchmark rate (which is expected to be Three-Month Term
SOFR) plus basis points for each quarterly interest period during
the floating rate period; provided, however, that if the Benchmark rate is less than zero, the Benchmark rate will be deemed to be zero.
For each interest period during the floating rate period, “Three-Month
Term SOFR” means the rate for Term SOFR for a tenor of three months that is published by the Term SOFR Administrator at the
Reference Time for any interest period, as determined by the calculation agent after giving effect to the Three-Month Term SOFR Conventions
(each as defined under “Description of the Notes”).
If the calculation agent determines on or prior to the relevant Reference
Time that a Benchmark Transition Event and its related Benchmark Replacement Date (each as defined under “Description of the Notes”)
have occurred with respect to Three-Month Term SOFR, then the provisions under “Description of the Notes — Effect
of Benchmark Transition Event,” which are referred to herein as the “benchmark transition provisions,” will thereafter
apply to all determinations of the interest rate on the Notes for each interest period during the floating rate period. In accordance
with the benchmark transition provisions, after a Benchmark Transition Event and its related Benchmark Replacement Date have occurred,
the interest rate on the Notes for each interest period during the floating rate period will be an annual rate equal to the Benchmark
Replacement (as defined under Description of the Notes) plus basis
points.
We will appoint a calculation agent for the Notes (which may be us
or an affiliate) prior to the commencement of the floating rate period. We expect to act as the initial calculation agent for the Notes. |
Interest Payment Dates |
Fixed
rate period: and of
each year, commencing on , 2022.
The last interest payment date for the fixed rate period will be ,
2027.
Floating
rate period: , , and
of each year, commencing on ,
2027. |
|
|
Record Dates |
Interest on each Note will be payable to the person in whose name such Note is registered on the 15th calendar day (whether or not a Business Day) immediately preceding the applicable interest payment date. |
|
|
Day Count Convention |
Fixed
rate period: 360-day year consisting of twelve 30-day months.
Floating
rate period: 360-day year and the actual number of days elapsed. |
|
|
No Guarantee |
The Notes will not be guaranteed by any of our subsidiaries. As a result, the Notes will be structurally subordinated to the liabilities of our subsidiaries as discussed below under “Ranking; Subordination.” |
|
|
Ranking; Subordination |
The Notes offered by this prospectus supplement will be issued by us
under an Indenture between BHLB and Wilmington Trust, National Association, as trustee (the “Trustee”), to be dated as of
the issue date (the “Base Indenture”), as supplemented by a First Supplemental Indenture between BHLB and the Trustee, to
be dated as of the issue date (the “First Supplemental Indenture”). We refer to the Base Indenture, as supplemented by the
First Supplemental Indenture, as the “Indenture.” The Notes will be our unsecured, subordinated obligations and:
• will
rank junior in right of payment and upon our liquidation to any of our existing and all future senior indebtedness (as defined under “Description
of the Notes — Subordination of the Notes”), all as described under “Description of the Notes”;
• will
rank equal in right of payment and upon our liquidation with any of our existing and all of our future indebtedness the terms of which
provide that such indebtedness ranks equally with the Notes, including $75.0 million of our 6.875% fixed-to-floating rate subordinated
notes due 2027;
• will
rank senior in right of payment and upon our liquidation to any of our existing or future indebtedness the terms of which provide that
such indebtedness ranks junior in right of payment to indebtedness such as the Notes, including $22.9 million of our junior subordinated
debentures relating to two issuances of trust preferred securities; and
• will
be effectively subordinated to our future secured indebtedness to the extent of the value of the collateral securing such indebtedness,
and structurally subordinated to the existing and future indebtedness of our subsidiaries, including without limitation the Bank’s
depositors, liabilities to general creditors and liabilities arising in the ordinary course of business or otherwise. |
|
As of March 31, 2022, on a consolidated basis, our outstanding
debt and deposits totaled approximately $10.8 billion, which includes approximately $10.7 billion of deposit liabilities that
rank senior to the Notes. In addition, as of March 31, 2022, we (at the holding company level only) had no outstanding indebtedness
that would rank senior to the Notes, $75.0 million of outstanding indebtedness that would rank pari passu to the Notes, and
$22.9 million of outstanding indebtedness that would rank junior to the Notes. The Indenture does not limit the amount of additional indebtedness
we or our subsidiaries may incur in the future. |
|
|
Form and Denomination |
The Notes will be offered in book-entry form only through the facilities of The Depository Trust Company (with its successors, “DTC”) in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. |
|
|
Optional Redemption |
We may, at our option, beginning with the interest payment date of , 2027, and on any interest payment date thereafter, redeem the Notes, in whole or in part, from time to time, subject to obtaining the prior approval of the Federal Reserve to the extent such approval is then required under the rules of the Federal Reserve, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus any accrued and unpaid interest to, but excluding, the date of redemption. |
|
|
Special Redemption |
We
may also redeem the Notes at any time prior to their maturity, including prior
to , 2027, in whole, but not
in part, subject to obtaining the prior approval of the Federal Reserve to the extent such approval is then required under the rules
of the Federal Reserve, if: (1) we receive an opinion from independent tax counsel to the effect that (a) there has been an
amendment or change (including any announced prospective amendment or change) in law, (b) an administrative or judicial action has
been announced or taken, (c) there has been an amendment to or change in any official position with respect to, or interpretation
of, an administrative or judicial action or a law or regulation that differs from the previously generally accepted position or
interpretation, or (d) there is a threatened challenge in connection with an audit of us or a similar issuer, in each case, as a
result of which, there is a more than insubstantial increase in the risk that interest payable by us on the Notes is not, or within
90 days of the date of such opinion, will not be deductible by us, in whole or in part, for U.S. federal income tax purposes;
(2) we make a good faith determination that as a result of a change or proposed change in laws, rules or regulations, or an
official administration action or pronouncement, there is more than an insubstantial risk that we will not be entitled to treat the
Notes as Tier 2 capital for regulatory capital purposes; or (3) we are required to register as an investment company under the
Investment Company Act of 1940, as amended (the “Investment Company Act”). In each case, the redemption would be at a
redemption price equal to 100% of the principal amount of the Notes being redeemed plus any accrued and unpaid interest to, but
excluding, the date of redemption. For more information, see “Description of the
Notes — Redemption.” |
Sinking Fund |
There is no sinking fund for the Notes. |
|
|
Future Issuances |
The Notes will initially be limited to an aggregate principal amount of $ . We may, from time to time, without notice to or consent of the holders of the Notes, issue additional Notes in the future. |
|
|
Use of Proceeds |
We estimate that the net proceeds from this offering will be approximately $ , after deducting the underwriting discount and our estimated offering expenses. We intend to use an amount equal to the net proceeds of this offering to finance or refinance new or existing assets consistent with our Sustainable Financing Framework, as may be modified from time to time. Pending allocation to such assets, the net proceeds may be used for general corporate purposes, including supporting strategic and organic growth and the repayment of other outstanding indebtedness that has no association with carbon-intensive activities. See “Use of Proceeds.” |
|
|
Listing |
The Notes will not be listed on any securities exchange or quoted on any quotation system. Currently, there is no market for the Notes, and there is no assurance that any public market for the Notes will develop. |
|
|
ERISA Considerations |
For a discussion of certain prohibited transactions and fiduciary duty issues pertaining to purchases by or on behalf of an employee benefit plan, see “Certain ERISA Considerations.” |
|
|
Material U.S. Federal Income Tax Considerations |
For a discussion of material U.S. federal income tax considerations of purchasing, owning and disposing of the Notes, see “Material U.S. Federal Income Tax Considerations.” |
|
|
Governing Law |
The Notes and the Indenture will be governed by the laws of the State of New York. |
|
|
Trustee |
Wilmington Trust, National Association |
|
|
Risk Factors |
Investing in the Notes involves risks. Potential investors are urged to read and consider the risk factors relating to an investment in the Notes set forth under “Risk Factors” beginning on page S-10 of this prospectus supplement, as well as the risk factors and other information included or incorporated by reference in this prospectus supplement and the accompanying prospectus, for a discussion of factors that you should carefully consider before deciding whether to invest in the Notes. |
RISK
FACTORS
An investment in our securities is subject to
risks inherent to our business. Before making an investment decision, you should carefully consider the risks and uncertainties described
below together with the risk factors and other information included in our Annual Report on Form 10-K for the year ended December 31,
2021 and in other documents that we subsequently file with the SEC, all of which are incorporated by reference into this prospectus supplement
and the accompanying prospectus. Additional risks and uncertainties that management is not aware of or that management currently deems
immaterial may also impair our business operations. See also the discussion under the heading “Cautionary Note Concerning Forward-Looking
Statements.” This prospectus supplement and the accompanying prospectus are qualified in their entirety by these risk factors. If
any of these risks actually occurs, our financial condition and results of operations could be materially and adversely affected. If this
were to happen, the value of our securities could decline significantly, and you could lose all or part of your investment.
Risk Factors Related to the Notes
The Notes will be unsecured and subordinated to any existing and
future senior indebtedness.
The Notes will be subordinated obligations of BHLB.
Accordingly, they will be junior in right of payment to any existing and all future senior indebtedness, and in certain events of insolvency,
to other financial obligations as described under “Description of the Notes.” Our senior indebtedness includes all indebtedness,
except indebtedness that is expressly subordinated to or ranked pari passu with the Notes, subject to certain exceptions.
The Notes will rank equally with all other unsecured subordinated indebtedness of BHLB issued in the future under the Indenture. In addition,
the Notes will be structurally subordinated to all existing and future indebtedness, liabilities and other obligations, including deposits
of our subsidiaries, including the Bank. As of March 31, 2022, on a consolidated basis, our outstanding debt and deposits totaled
approximately $10.8 billion, which includes approximately $10.7 billion of deposit liabilities that rank senior to the Notes.
In addition, as of March 31, 2022, we (at the holding company level only) had no indebtedness that would rank senior to the Notes,
$75.0 million of indebtedness that would rank pari passu to the Notes, and $22.9 million of indebtedness that
would rank junior to the Notes.
In addition, the Notes will not be secured by any
of our assets. As a result, the Notes will be effectively subordinated to all of our secured indebtedness to the extent of the value of
the assets securing such indebtedness. The Indenture governing the Notes does not limit the amount of senior indebtedness and other financial
obligations or secured obligations that we or our subsidiaries may incur.
As a result of the subordination provisions described
above, holders of the Notes may not be fully repaid in the event of our bankruptcy, liquidation or reorganization.
The Notes will not be insured or guaranteed by the FDIC, any other
governmental agency or any of our subsidiaries. The Notes will be structurally subordinated to the indebtedness and other liabilities
of our subsidiaries, which means that creditors of our subsidiaries generally will be paid from those subsidiaries’ assets before
holders of the Notes would have any claims to those assets.
The Notes are not savings accounts, deposits or
other obligations of the Bank or any of our non-bank subsidiaries and are not insured or guaranteed by the FDIC or any other governmental
agency or public or private insurer. The Notes are obligations of BHLB only and are neither obligations of, nor guaranteed by, any of
our subsidiaries. The Notes will be structurally subordinated to all existing and future indebtedness and other liabilities of our subsidiaries,
which means that creditors of our subsidiaries (including, in the case of the Bank, its depositors) generally will be paid from those
subsidiaries’ assets before holders of the Notes would have any claims to those assets. Even if we become a creditor of any of our
subsidiaries, our rights as a creditor would be subordinate to any security interest in the assets of that subsidiary and any debt of
that subsidiary senior to that held by us, and our rights could otherwise be subordinated to the rights of other creditors and depositors
of that subsidiary. Furthermore, none of our subsidiaries is under any obligation to make payments to us, and any payments to us depend
on the earnings or financial condition of our subsidiaries and various business considerations. Statutory, contractual or other restrictions
also limit our subsidiaries’ ability to pay dividends or make distributions, loans or advances to us. For these reasons, we may
not have access to any assets or cash flows of our subsidiaries to make interest and principal payments on the Notes.
There can be no assurance that the use of proceeds from the sale
of the Notes to finance or refinance new or existing assets consistent with our Sustainable Financing Framework, as modified from time
to time, will be suitable for the investment criteria of an investor and there is no contractual obligation to allocate an amount equal
to the net proceeds of the sale of the Notes to such assets.
We expect to allocate an amount equal to the net
proceeds from the sale of the Notes to finance or refinance, in whole or in part, new or existing green or social assets that meet certain
eligibility requirements, pursuant to our Sustainable Financing Framework. However, the specific net proceeds of the sale of the Notes
will be managed according to normal liquidity practices of our consolidated enterprise. Pending allocation to such assets, the net proceeds
may be used for general corporate purposes, including supporting strategic and organic growth and the repayment of other outstanding indebtedness
that has no association with carbon-intensive activities. Furthermore, in connection with the allocation of an amount equal to the net
proceeds from the sale of the Notes to assets consistent with our Sustainable Financing Framework, no assurance can be given that such
allocation will be capable of being completed within any specified period or at all. Prospective investors should consider the information
in the “Use of Proceeds” section below and consult with their advisors before making an investment in the Notes. Prospective
investors must determine for themselves the relevance of such information for the purpose of any investment in the Notes, together with
any other investigation they deem necessary.
In addition, there is no contractual obligation
to allocate an amount equal to the net proceeds of the sale of the Notes to assets consistent with our Sustainable Financing Framework
or to provide periodic progress reports on the allocation of the proceeds from the sale of the Notes. Our failure to allocate an amount
equal to the net proceeds of the Notes to finance or refinance existing or new assets consistent with our Sustainable Financing Framework
or to provide periodic progress reports, the failure of any business or project related to assets consistent with our Sustainable Financing
Framework to meet investor expectations regarding such “sustainable” performance objectives, or the failure of an independent
external review provider with environmental or social expertise to issue a second party opinion on the allocation of the proceeds or the
withdrawal of any such opinion, will not constitute a breach of contract or an event of default under the Notes or the indenture. Any
such failure may adversely affect the value of the Notes and/or have adverse consequences for certain investors with portfolio mandates
to invest in social assets.
There is no legal, regulatory or market definition of, or standardized
criteria for, what constitutes a “green,” “social,” “sustainable” or other equivalently labeled asset
or financial instrument, and any such designations made by us or third parties with respect to our assets or the Notes may not be suitable
for the investment criteria of an investor.
There currently is no clear definition (legal,
regulatory or otherwise) of, nor market consensus as to what constitutes, a “green,” “social” or “sustainable”
asset or financial instrument, or as to what precise attributes are required for a particular asset to be defined as such, nor can any
assurance be given that such a clear definition or consensus will develop over time. Accordingly, no assurance is given by us or any underwriters
or any other person that the allocation of an amount equal to the net proceeds of the sale of the Notes to finance or refinance any
new or existing assets consistent with our Sustainable Financing Framework will satisfy, whether in whole or in part, any current or future
investor expectations or requirements regarding any investment criteria or guidelines with which such investor or its investments are
required to comply (whether by any current or future applicable law or regulation or by its own bylaws or other governing rules or
investment portfolio mandates), in particular with regard to any direct or indirect social impact of any assets consistent with our Sustainable
Financing Framework.
In addition, no assurance or representation is
given by us or any manager as to the suitability or reliability for any purpose whatsoever of any “second party opinion” or
certification regarding the allocation of proceeds (whether or not solicited by us or any affiliate), in particular with respect to whether
any assets consistent with our Sustainable Financing Framework fulfill any social or other criteria. Any such opinion or certification
is not, nor should it be deemed to be, a recommendation by us or any manager to buy, sell or hold any Notes. Any such opinion or certification
is only current as of the date it was initially issued. To our knowledge, currently the providers of such opinions and certifications
are not subject to any specific regulatory or other regime or oversight. In addition, any such provider will have been engaged by us or
one of our affiliates and will receive a fee in connection with the issuance of any such opinion or certification. Prospective investors
must determine for themselves the relevance and reliability of any such opinion or certification and/or the information contained therein,
as well as the provider of any such opinion or certification, for the purpose of any investment in the Notes. Any withdrawal of any opinion
or any additional opinion attesting that we are not complying in whole or in part with any matters for which any opinion is opining may
have a material adverse effect on the value of the Notes and/or result in adverse consequences for certain investors with mandates to
invest in securities to be used for a particular purpose. For the avoidance of doubt, no such opinion or certification is, nor shall it
be deemed to be, incorporated into this prospectus supplement or prospectus.
The Notes may not be listed or admitted to any dedicated “green,”
“environmental,” “social,” “sustainable” or other equivalently-labeled segment of any stock exchange
or securities market, and the Notes may not be included in any green, environmental, social, sustainable bond or other equivalent index,
and any such potential listing, admission or inclusion may not be indicative that the Notes are or will be suitable for the investment
criteria of an investor.
While no assurance can be given that any such listing,
admission or inclusion will happen, in the event that the Notes are listed or admitted to trading on any dedicated “green,”
“environmental,” “social,” “sustainable” or other equivalently-labeled segment of any stock exchange
or securities market (whether or not regulated), or included in any green, environmental, social, sustainable bond or other equivalent
index, no representation or assurance can be given by us, any underwriter or any other person:
| • | that such listing, admission or inclusion would satisfy (or would continue to satisfy), whether in whole or in part, any present or
future investor expectations or requirements, taxonomies or standards or other investment criteria or guidelines with which such investor
or its investments are required to comply, whether by any present or future applicable laws or regulations or by its own by-laws or other
governing rules or investment portfolio mandates, ratings mandates or other expectations, in particular with regard to any direct
or indirect environmental, social or sustainability impact of any assets financed pursuant to our Sustainable Financing Framework (and
it should be noted that the criteria for any such listings or admission to trading may vary from one stock exchange, securities market
or index to another); or |
| • | that any such listing or admission to trading or inclusion in any index will be maintained during the term of the Notes. |
In the event that the Notes are listed on any such
exchange or securities market or included in any such index, any change to the listing or admission status of the Notes or their inclusion
in any such index, including, but not limited to, if the Notes are no longer being listed or admitted to trading on any stock exchange
or securities market or included in any index, may have a material adverse effect on the value of the Notes and/or result in adverse consequences
for certain investors with portfolio mandates to invest in securities to be used for a particular purpose.
The
trading price of the Notes may be negatively affected to the extent that perception by investors of the suitability of the
Notes as “green” bonds deteriorates or demand for sustainability-themed investment products diminishes.
Perception by investors of the suitability of the
Notes as “green” bonds could be negatively affected by controversies involving the environmental or sustainability impact
of our business or industry, evolving standards or market consensus as to what constitutes a “green” bond or the desirability
of investing in “green” bonds or the suitability of the Notes as “green” bonds no longer being in effect. Additionally,
the assets consistent with our Sustainable Financing Framework to which we intend to disburse the net proceeds, or an amount equal to
the net proceeds, from the sale of the Notes have complex direct or indirect environmental or sustainability impacts, and adverse environmental
impacts may occur during the design, construction and operation of such assets. Such assets may become controversial or criticized by
activist groups or other stakeholders. Neither the Company, nor the underwriters, the Trustee or any regulatory body makes any representation
as to the suitability of the Notes to meet or fulfill environmental or sustainability criteria, expectations, impact or performance required
by prospective investors, any third-party reviewer or opinion provider, or any stock exchange or securities market. The trading price
of the Notes may be negatively affected to the extent investors are required or choose to sell their holdings due to deterioration in
the perception by the investor or the market in general as to the suitability of this offering as “green” bonds. The trading
price of the Notes may be also negatively affected to the extent demand for sustainability-themed investment products diminishes due to
evolving investor preferences, increased regulatory or market scrutiny on funds and strategies dedicated to sustainability or environmental
or governance themed investing or for other reasons.
The Indenture governing the Notes does not contain any limitations
on our ability to incur additional indebtedness, grant or incur a lien on our assets, sell or otherwise dispose of assets, pay dividends
or repurchase our capital stock.
Neither we nor any of our subsidiaries are restricted
from incurring additional indebtedness or other liabilities, including additional senior or subordinated indebtedness, under the Indenture
governing the terms of the Notes. If we incur additional indebtedness or liabilities, our ability to pay our obligations on the Notes
could be adversely affected. We expect that we will from time to time incur additional indebtedness and other liabilities. In addition,
we are not restricted under the Indenture governing the Notes from granting or incurring a lien on any of our assets, selling or otherwise
disposing of any of our assets, paying dividends or issuing or repurchasing our securities including our regular quarterly dividend and
share repurchases pursuant to our previously announced share repurchase program.
In addition, there are no financial covenants in
the Indenture governing the Notes. Except as expressly provided in the Indenture, you are not protected under the Indenture governing
the Notes in the event of a highly leveraged transaction, reorganization, default under our existing indebtedness, restructuring, merger
or similar transaction that may adversely affect you. See “Description of the Notes — Consolidation, Merger
and Sale of Assets.”
Payments on the Notes will depend on receipt of dividends and distributions
from our subsidiaries.
We are a bank holding company and we conduct substantially
all of our operations through subsidiaries, including the Bank. We depend on dividends, distributions and other payments from our subsidiaries
to meet our obligations, including to fund payments on the Notes.
Federal and state banking regulations limit
dividends from our bank subsidiary to us. Under Massachusetts law, the Bank may declare cash dividends from net profits not more
frequently than quarterly. No dividends may be declared, credited or paid if the Bank’s capital stock is impaired. The
approval of the Massachusetts Commissioner of Banks is generally required if the total of all dividends declared in any calendar
year exceeds the total of its net profits for that year combined with its retained net profits of the preceding two years. The
approval of both the Commissioner and the FDIC is required for the Bank to pay a dividend from its surplus account, which was the
case during 2021 for dividends from the Bank to the Company, and which is expected to be the case for the remainder of 2022. The
Bank had a retained deficit of $324.4 million as of March 31, 2022.
In addition, federal bank regulatory agencies have
the authority to prohibit the Bank from engaging in unsafe or unsound practices in conducting its business. The payment of dividends or
other transfers of funds to us, depending on the financial condition of the Bank, could be deemed an unsafe or unsound practice.
Accordingly, we can provide no assurance that we
will receive dividends or other distributions from our bank subsidiary and our other subsidiaries in an amount sufficient to pay interest
on or principal of the Notes.
We may not be able to generate sufficient cash to service all of
our debt, including the Notes.
Our ability to make scheduled payments of principal
and interest, or to satisfy our obligations in respect of our debt or to refinance our debt, will depend on the future performance of
our operating subsidiaries. Prevailing economic conditions (including interest rates), regulatory constraints, including, without limitation,
limiting distributions to us from the Bank and required capital levels with respect to the Bank and financial, business and other factors,
many of which are beyond our control, will also affect our ability to meet these needs. Our subsidiaries may not be able to generate sufficient
cash flows from operations, or we may be unable to obtain future borrowings in an amount sufficient to enable us to pay our debt, or to
fund our other liquidity needs. We may need to refinance all or a portion of our debt at or before maturity. We may not be able to refinance
any of our debt when needed (including, without limitation, upon commencement of the floating rate period) on commercially reasonable
terms or at all.
Regulatory guidelines may restrict our ability to pay the principal
of, and accrued and unpaid interest on, the Notes.
As a bank holding company, our ability to pay the
principal of, and interest on, the Notes is subject to the rules and guidelines of the Federal Reserve regarding capital adequacy.
We intend to treat the Notes as “Tier 2 capital” under these rules and guidelines. The Federal Reserve guidelines generally
require us to review the effects of the cash payment on Tier 2 capital instruments, such as the Notes, on our overall financial condition.
The guidelines also require that we review our net income for the current and past four quarters, and the amounts we have paid on Tier
2 capital instruments for those periods, as well as our projected rate of earnings retention. Moreover, pursuant to federal law and Federal
Reserve regulations, as a bank holding company, we are required to act as a source of financial and managerial strength to the Bank and
commit resources to its support, including, without limitation, the guarantee of its capital plans if it is undercapitalized. Such support
may be required at times when we may not otherwise be inclined or able to provide it. As a result of the foregoing, we may be unable to
pay accrued interest on the Notes on one or more of the scheduled interest payment dates, or at any other time, or the principal of the
Notes at the maturity of the Notes.
If we were to be the subject of a bankruptcy proceeding
under Chapter 11 of the U.S. Bankruptcy Code, then the bankruptcy trustee would be deemed to have assumed, and would be required to cure
immediately, any deficit under any commitment we have to any of the federal banking agencies to maintain the capital of the Bank, and
any other insured depository institution for which we have such a responsibility, and any claim for breach of such obligation would generally
have priority over most other unsecured claims.
Holders of the Notes will have limited rights, including limited
rights of acceleration, if there is an event of default.
Payment of principal on the Notes may be accelerated
only in the case of certain events of bankruptcy or insolvency involving us or the Bank. There is no automatic acceleration, or right
of acceleration, in the case of default in the payment of principal of or interest on the Notes, or in the performance of any of our other
obligations under the Notes or the Indenture governing the Notes. Our regulators can, if we or the Bank become subject to an enforcement
action, prohibit the Bank from paying dividends to us, and prevent our payment of interest on or principal of the Notes and any dividends
on our capital stock, but such limits will not permit acceleration of the Notes. See “Description of the Notes — Events
of Default; Limitation on Suits.”
An active trading market for the Notes may not develop.
The Notes constitute a new issue of securities
for which there is no existing trading market. We do not intend to apply for listing of the Notes on any securities exchange or for quotation
of the Notes in any automated dealer quotation system. We cannot provide you with any assurance regarding whether a trading market for
the Notes will develop, the ability of holders of the Notes to sell their Notes or the prices at which holders may be able to sell their
Notes. The underwriters have advised us that they currently intend to make a secondary market in the Notes. The underwriters, however,
are not obligated to do so, and any market-making with respect to the Notes may be discontinued at any time without notice. There may
be a limited number of buyers if you decide to sell your Notes. This may affect the price you receive for your Notes or your ability to
sell your Notes at all. Investors in the Notes may not be able to sell the Notes at all or may not be able to sell the Notes at prices
that will provide them with a yield comparable to similar investments that have a developed secondary market, and may consequently suffer
from increased pricing volatility and market risk.
If a trading market for the Notes develops, changes in the debt
markets, among others, could adversely affect your ability to liquidate your investment in the Notes and the market price of the Notes.
Many factors could affect the trading market for,
and the trading value of, the Notes. These factors include: the method of calculating the principal, premium, if any, interest or other
amounts payable, if any, on the Notes; the time remaining to the maturity of the Notes; the ranking of the Notes; the redemption features
of the Notes; the outstanding amount of subordinated notes with terms similar or identical to the Notes offered hereby; the prevailing
interest rates being paid by other companies similar to us; changes in U.S. interest rates; whether the ratings on the Notes or us provided
by any rating agency have changed; our financial condition, financial performance and future prospects; the level, direction and volatility
of market interest rates generally; general economic conditions of the capital markets in the United States; and geopolitical conditions
and other financial, political, regulatory, and judicial events that affect the capital markets generally. The condition of the financial
markets and prevailing interest rates have fluctuated significantly in the past and are likely to fluctuate in the future. Such fluctuations
could adversely affect the trading market (if any) for, and the market price of, the Notes.
Because the Notes may be redeemed at our option under certain circumstances
prior to their maturity, if we elect to redeem all or any portion of the Notes, you may be subject to reinvestment risk.
On or after
, 2027, we may, at our option, redeem the Notes in whole or in part on each interest
payment date. In addition, we may also redeem the Notes prior to maturity, at our option, in whole but not in part, if: (1) we receive
an opinion from independent tax counsel to the effect that (a) there has been an amendment or change (including any announced prospective
amendment or change) in law, (b) an administrative or judicial action has been announced or taken, (c) there has been an amendment
to or change in any official position with respect to, or interpretation of, an administrative or judicial action or a law or regulation
that differs from the previously generally accepted position or interpretation, or (d) there is a threatened challenge in connection
with an audit of us or a similar issuer, in each case that, as a result of which, there is a more than insubstantial increase in the risk
that interest payable by us on the Notes is not, or within 90 days of the date of such opinion, will not be deductible by us, in
whole or in part, for U.S. federal income tax purposes; (2) we make a good faith determination that as a result of a change or proposed
change in laws, rules or regulations, or an official administration action or pronouncement, there is more than an insubstantial
risk that we will not be entitled to treat the Notes as Tier 2 capital for regulatory capital purposes; or (3) we are required to
register as an investment company under the Investment Company Act. The redemption price for any redemption is 100% of the principal amount
of the Notes to be redeemed, plus accrued and unpaid interest thereon, if any, to, but excluding, the date of redemption. Any redemption
of the Notes will be subject to the receipt of the approval of the Federal Reserve, to the extent then required under applicable laws
or regulations, including capital regulations. Any such redemption may have the effect of reducing the income or return that you may receive
on an investment in the Notes by reducing the term of the investment. Under current regulatory capital guidelines, the aggregate principal
amount of the Notes that will count as Tier 2 capital will be reduced by 20% in each of the last five years prior to the Maturity
Date of the Notes. As a result, we may be more likely to redeem the Notes prior to their Maturity Date. If this occurs, you may not be
able to reinvest the proceeds at an interest rate comparable to the rate paid on the Notes. See “Description of the Notes — Redemption.”
We may elect to redeem the Notes on or after the
date on which they become redeemable at our option; however, investors should not expect us to make such election on such date when the
Notes are first redeemable or at any time thereafter. Under Federal Reserve regulations, unless the Federal Reserve authorizes us in writing
to do otherwise, we may not redeem the Notes unless they are replaced with other Tier 2 capital instruments or unless we can demonstrate
to the satisfaction of the Federal Reserve that, following redemption, we will continue to hold capital commensurate with our risk.
The amount of interest payable on the Notes will vary after
, 2027.
During the fixed rate period, the Notes will bear
interest at an initial rate of % per annum. Thereafter, the Notes will bear interest at a floating rate per
annum equal to the Benchmark rate (which is expected to be Three-Month Term SOFR) plus
basis points, subject to the provisions under “Description of the Notes — Interest.” The
per annum interest rate that is determined at the reference time for each interest period will apply to the entire quarterly interest
period following such determination date even if the Benchmark rate increases during that period.
Floating rate notes bear additional significant
risks not associated with fixed rate debt securities. These risks include fluctuation of the interest rates and the possibility that you
will receive an amount of interest that is lower than expected. We have no control over a number of matters, including, without limitation,
economic, financial, and political events, that are important in determining the existence, magnitude, and longevity of market volatility
and other risks and their impact on the value of, or payments made on, the Notes. In recent years, interest rates have been volatile,
and that volatility may be expected in the future.
Our published credit ratings may not reflect all risks of an investment
in the Notes.
The published credit ratings of us or our indebtedness
are an assessment by rating agencies of our ability to pay our debts when due. These ratings are not recommendations to purchase, hold
or sell the Notes, inasmuch as the ratings do not comment as to market price or suitability for a particular investor, are limited in
scope, and do not address all material risks relating to an investment in the Notes, but rather reflect only the view of each rating agency
at the time the rating is issued. The published credit ratings assigned to the Notes may not reflect the potential impact of all risks
related to structure and other factors on any trading market for, or trading value of, the Notes.
Accordingly, you should consult your own financial
and legal advisors as to the risks entailed by an investment in the Notes and the suitability of investing in the Notes in light of your
particular circumstances.
A downgrade of our credit ratings or the ratings of our subsidiaries
or other financial institutions could have a material adverse impact on us and the value of and market for the Notes.
Rating agencies continuously evaluate us and our
subsidiaries, and their ratings of our long-term and short-term debt are based on a number of factors, including financial strength, as
well as factors not entirely within our control, such as conditions affecting the financial services industry generally. In light of these
reviews and the continued focus on the financial services industry generally, we and our subsidiaries may not be able to maintain our
current credit ratings. Ratings downgrades by a rating agency could have a significant and immediate impact on our funding and liquidity
through cash obligations, reduced funding capacity and collateral triggers. A reduction in our or our subsidiaries’ credit ratings
could also increase our borrowing costs and limit access to the capital markets. These changes could have a material adverse impact on
the value of and market for the Notes.
Downgrades in the credit or financial strength
ratings assigned to the counterparties with whom we transact could create the perception that our financial condition will be adversely
impacted as a result of potential future defaults by such counterparties. Additionally, we could be adversely affected by a general, negative
perception of financial institutions caused by the downgrade of other financial institutions. Accordingly, ratings downgrades for other
financial institutions could affect the market price of our stock and could limit our access to or increase our cost of capital. These
changes could have a material adverse impact on the value of and market for the Notes.
Investors should not rely on indicative or historical data concerning
SOFR.
The interest rate during the floating rate period
will be determined using Three-Month Term SOFR (unless a Benchmark Transition Event and its related Benchmark Replacement Date occur with
respect to Three-Month Term SOFR, in which case the rate of interest will be based on the next-available Benchmark Replacement, which
is Compounded SOFR). In the following discussion of SOFR, when we refer to the Notes, we mean the Notes at any time during the floating
rate period when the interest rate on the Notes is or will be determined based on SOFR, including Three-Month Term SOFR.
SOFR is published by the Federal Reserve Bank of
New York (“FRBNY”) and is intended to be a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury
securities. FRBNY reports that SOFR includes all trades in the Broad General Collateral Rate, plus bilateral U.S. Treasury repurchase
agreement (“repo”) transactions cleared through the delivery-versus-payment service offered by the Fixed Income Clearing Corporation
(the “FICC”), a subsidiary of DTC. SOFR is filtered by FRBNY to remove a portion of the foregoing transactions considered
to be “specials.” According to FRBNY, “specials” are repos for specific-issue collateral that take place at cash-lending
rates below those for general collateral repos because cash providers are willing to accept a lesser return on their cash to obtain a
particular security.
FRBNY reports that SOFR is calculated as a volume-weighted
median of transaction-level tri-party repo data collected from The Bank of New York Mellon, which currently acts as the clearing bank
for the tri-party repo market, as well as General Collateral Finance Repo transaction data and data on bilateral U.S. Treasury repo transactions
cleared through the FICC’s delivery-versus-payment service. FRBNY states that it obtains information from DTCC Solutions LLC, an
affiliate of DTC.
FRBNY currently publishes SOFR daily on its website
at https://apps.newyorkfed.org/markets/autorates/sofr. FRBNY states on its publication page for SOFR
that use of SOFR is subject to important disclaimers, limitations and indemnification obligations, including that FRBNY may alter the
methods of calculation, publication schedule, rate revision practices or availability of SOFR at any time without notice. The foregoing
Internet website is an inactive textual reference only, meaning that the information contained on the website is not part of this prospectus
supplement or the accompanying prospectus or incorporated by reference herein or therein.
FRBNY started publishing SOFR in April 2018.
FRBNY has also started publishing historical indicative SOFRs dating back to 2014, although such historical indicative data inherently
involves assumptions, estimates and approximations. Investors should not rely on such historical indicative data or on any historical
changes or trends in SOFR as an indicator of the future performance of SOFR.
Term SOFR and SOFR may be more volatile than other benchmark or
market rates.
Since the initial publication of SOFR, daily changes
in the rate have, on occasion, been more volatile than daily changes in comparable benchmark or market rates, and Term SOFR and SOFR over
time may bear little or no relation to the historical actual or historical indicative data. In addition, the return on and value of the
Notes may fluctuate more than floating rate securities that are linked to less volatile rates.
Changes in Term SOFR and SOFR could adversely affect holders of
the Notes and the trading prices for the Notes.
Because Term SOFR and SOFR are based on data received
from other sources, we have no control over its determination, calculation or publication. There is no assurance that SOFR will not be
discontinued or fundamentally altered in a manner that is materially adverse to the interests of investors in the Notes. If the manner
in which Term SOFR or SOFR are calculated is changed, that change may result in a reduction in the amount of interest that accrues on
the Notes during the floating rate period, which may adversely affect the trading prices of the Notes. Further, if the Benchmark rate
on the Notes during the floating rate period on any determination date declines to zero or becomes negative, the interest rate will be
deemed to equal zero. In addition, once the Benchmark rate for the Notes for each interest period during the floating rate period is determined
by the calculation agent on the determination date, interest on the Notes will accrue at such Benchmark rate for the applicable interest
period and will not be subject to change during such interest period. There is no assurance that changes in Term SOFR or SOFR could not
have a material adverse effect on the yield on, value of and market for the Notes.
SOFR differs fundamentally from, and may not be a comparable substitute
for, U.S. dollar LIBOR.
In June 2017, the Alternative Reference Rates
Committee (the “ARRC”) convened by the Federal Reserve and FRBNY announced SOFR as its recommended alternative to the London
interbank offered rate (“LIBOR”) for U.S. dollar obligations. However, because SOFR is a broad U.S. Treasury repo financing
rate that represents overnight secured funding transactions, it differs fundamentally from LIBOR. For example, SOFR is a secured overnight
rate, while LIBOR is an unsecured rate that represents interbank funding over different maturities. In addition, because SOFR is a transaction-based
rate, it is backward-looking, whereas LIBOR is forward-looking. Because of these and other differences, there is no assurance that SOFR
will perform in the same way as LIBOR would have performed at any time, and there is no guarantee that it is a comparable substitute for
LIBOR.
Any failure of Term SOFR or SOFR to gain market acceptance could
adversely affect holders of the Notes.
Term SOFR or SOFR may fail to gain market acceptance.
SOFR was developed for use in certain U.S. dollar derivatives and other financial contracts as an alternative to LIBOR in part because
it is considered to be a good representation of general funding conditions in the overnight U.S. Treasury repo market. However, as a rate
based on transactions secured by U.S. Treasury securities, it does not measure bank-specific credit risk and, as a result, is less likely
to correlate with the unsecured short-term funding costs of banks. This may mean that market participants would not consider SOFR to be
a comparable substitute or successor for all of the purposes for which LIBOR historically has been used (including, without limitation,
as a representation of the unsecured short-term funding costs of banks), which may, in turn, lessen its market acceptance. Any failure
of Term SOFR or SOFR to gain market acceptance could adversely affect the yield on, value of and market for the Notes.
The interest rate for the Notes during the applicable floating rate
period may be determined based on a rate other than Three-Month Term SOFR.
Under the terms of the Notes, the interest rate
on the Notes for each interest period during the applicable floating rate period will be based on Three-Month Term SOFR, a forward-looking
term rate for a tenor of three months that will be based on SOFR. On July 29, 2021, the ARRC formally recommended the use of
the CME Group’s computation of forward-looking SOFR term rates. Uncertainty surrounding the adoption and use of forward-looking
term rates based on SOFR could have a material adverse effect on the return on, value of, and market for the Notes. If, at the commencement
of the floating rate period for the Notes, we determine that the use of a forward-looking rate for a tenor of three months based
on SOFR is not administratively feasible, then the next-available Benchmark Replacement under the benchmark transition provisions will
be used to determine the interest rate on the Notes during the applicable floating rate period (unless a Benchmark Transition Event and
its related Benchmark Replacement Date occur with respect to that next-available Benchmark Replacement).
Under the terms of the Notes, the calculation agent
is expressly authorized to make determinations, decisions or elections with respect to technical, administrative or operational matters
that it decides are appropriate to reflect the use of Three-Month Term SOFR as the interest rate basis for the Notes, which are defined
in the terms of the Notes as “Three-Month Term SOFR Conventions.” Such determination and implementation of any Three-Month
Term SOFR Conventions could result in adverse consequences to the amount of interest that accrues on the Notes during the applicable floating
rate period, which could adversely affect the return on, value of and market for the Notes.
Any Benchmark Replacement may not be the economic equivalent of
Three-Month Term SOFR.
Under the benchmark transition provisions of the
Notes, if the calculation agent determines that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred
with respect to Three-Month Term SOFR, then the floating interest rate on the Notes for each interest period during the floating rate
period will be determined using the next-available Benchmark Replacement (which may include a related Benchmark Replacement Adjustment).
However, the Benchmark Replacement may not be the economic equivalent of Three-Month Term SOFR. For example, Compounded SOFR, the first-available
Benchmark Replacement, is the compounded average of the daily SOFR calculated in arrears, while Three-Month Term SOFR is intended to be
a forward-looking rate with a tenor of three months. Neither the ARRC nor FRBNY has made a final determination regarding the method
for calculating Compounded SOFR. In addition, very limited market precedent exists for securities that use Compounded SOFR as the rate
basis, and the method for calculating Compounded SOFR in those precedents varies. Further, the ISDA Fallback Rate, which is another Benchmark
Replacement, has not yet been established and may change over time.
The implementation of Benchmark Replacement Conforming Changes could
adversely affect holders of the Notes.
Under the benchmark transition provisions of the
Notes, if Three-Month Term SOFR has been discontinued or if a particular Benchmark Replacement or Benchmark Replacement Adjustment cannot
be determined, then the next-available Benchmark Replacement or Benchmark Replacement Adjustment will apply. These replacement rates and
adjustments may be selected or formulated by: (1) the Relevant Governmental Body (such as the ARRC or FRBNY); (2) the International
Swaps and Derivatives Association, Inc. (“ISDA”); or (3) in certain circumstances, us. In addition, the benchmark
transition provisions expressly authorize us to make certain changes, which are defined in the terms of the Notes as “Benchmark
Replacement Conforming Changes,” with respect to, among other things, the determination of interest periods, and the timing and
frequency of determining rates and making payments of interest. The application of a Benchmark Replacement and Benchmark Replacement Adjustment,
and any implementation of Benchmark Replacement Conforming Changes, could result in adverse consequences to the amount of interest that
accrues on the Notes during any interest period during the floating rate period, which could adversely affect the yield on, value of and
market for the Notes. Further, there is no assurance that the characteristics of any Benchmark Replacement will be similar to the then-current
Benchmark rate that it is replacing, or that any Benchmark Replacement will produce the economic equivalent of the then-current Benchmark
rate that it is replacing.
Also, since SOFR is a relatively new market index,
SOFR-linked debt securities likely will have no established trading market when issued, and an established trading market may never develop
or may not be very liquid. Market terms for debt securities indexed to SOFR or Term SOFR, such as the spread over the index reflected
in interest rate provisions, may evolve over time, and trading prices of the Notes may be lower than those of later-issued SOFR-linked
debt securities as a result. Similarly, if Term SOFR or SOFR does not prove to be widely used in securities similar to the Notes, the
trading price of the Notes may be lower than those of debt securities linked to such rates that are more widely used. Debt securities
indexed to SOFR (as the Notes will be) may not be able to be sold at all or may not be able to be sold at prices that will provide a yield
comparable to similar investments that have a developed secondary market, and may consequently suffer from increased pricing volatility
and market risk.
We or an affiliate of ours will or could have authority to make
determinations and elections that could affect the return on, value of and market for the Notes.
Under the terms of the Notes, we may make certain
determinations, decisions and elections with respect to the Benchmark rate on the Notes during the floating rate period, including, without
limitation, any determination, decision or election required to be made by the calculation agent that the calculation agent fails to make.
We will make any such determination, decision or election in our sole discretion, and any such determination, decision or election that
we make could affect the amount of interest that accrues on the Notes during any interest period in the floating rate period. If the calculation
agent fails, when required, to make a determination that a Benchmark Transition Event and its related Benchmark Replacement Date have
occurred, or fails, when required, to determine the Benchmark Replacement and Benchmark Replacement Adjustment, then we will make those
determinations in our sole discretion. Furthermore, we or an affiliate of ours may serve as calculation agent. We expect to act as the
initial calculation agent and, though we will appoint a calculation agent prior to the commencement of the floating rate period, we may
appoint ourselves or an affiliate and we cannot assure you that we will appoint an independent third-party calculation agent at any time.
Any exercise of discretion by us under the terms of the Notes, including, without limitation, any discretion exercised by us or by an
affiliate acting as calculation agent, could present a conflict of interest. In making the required determinations, decisions and elections,
we or an affiliate of ours acting as calculation agent may have economic interests that are adverse to the interest of the holders of
the Notes, and those determinations, decisions or elections could have a material adverse effect on the yield on, value of and market
for the Notes. All determinations, decisions or elections by us, or by us or an affiliate acting as calculation agent, under the terms
of the Notes will be conclusive and binding absent manifest error.
The Notes may be issued with original issue discount for U.S. federal
income tax purposes.
The Notes may be issued with original issue discount
for U.S. federal income tax purposes. In such case, holders subject to U.S. federal income taxation, whether on the cash or accrual method
of tax accounting, generally would be required to include any amounts representing original issue discount in gross income (as ordinary
income) as the original issue discount accrues on a constant yield to maturity basis, in advance of the receipt of cash payments to which
such income is attributable. See “Material U.S. Federal Income Tax Considerations.”
USE OF PROCEEDS
We
estimate that the net proceeds from this offering will be approximately $ , after deducting the
underwriting discount and our estimated offering expenses. The Company intends to use an amount equal to the net proceeds from this
offering to finance or refinance new or existing assets consistent with the Company’s Sustainable Financing Framework,
as may be modified from time to time. Pending allocation to such assets, the net proceeds may be used for general corporate
purposes, including supporting strategic and organic growth and the repayment of other outstanding indebtedness that has no
association with carbon-intensive activities. Our Sustainable Financing Framework is available on our website and has received a "second party opinion" by an independent consultant.
Information contained on, or accessible through, our website and in our Sustainable Financing Framework is not incorporated in, and is
not part of, this prospectus supplement or prospectus or any other report or filing we make with the SEC.
Our management will have broad discretion in the
use of the net proceeds from the sale of the Notes. The foregoing represents our intentions based upon our present plans and business
conditions. The occurrence of unforeseen events or changed business conditions, however, could result in the application of the net proceeds
of the offering in a manner other than as described in this prospectus supplement.
CAPITALIZATION
The following table shows our capitalization at
March 31, 2022:
(1) on a consolidated basis; and
(2) on a consolidated basis as adjusted to
give effect to the issuance and sale of the Notes in this offering (after deducting the underwriting discount and estimated offering expenses).
This table should be read in conjunction with the
risk factors and the consolidated financial statements and related notes of BHLB incorporated by reference into this prospectus supplement
and the accompanying prospectus. See “Where You Can Find More Information.”
| |
As of March 31, 2022 | |
(Dollars in thousands) | |
Actual | | |
As adjusted for this offering | |
Cash and Cash Equivalents | |
$ | 1,607,251 | | |
$ | 1,607,251 | |
Liabilities and Shareholders’ Equity: | |
| | | |
| | |
Deposits: | |
| | | |
| | |
Non-interest bearing | |
| 3,020,568 | | |
| 3,020,568 | |
Interest bearing | |
| 7,678,640 | | |
| 7,678,640 | |
Total deposits | |
| 10,699,208 | | |
| 10,699,208 | |
Long-term Federal Home Loan Bank and other advances | |
| 14,563 | | |
| 14,563 | |
Subordinated notes | |
| 74,633 | | |
| 74,633 | |
Junior subordinated borrowings | |
| 22,936 | | |
| 22,936 | |
% Notes offered hereby(1) | |
| — | | |
| (3 | ) |
Other liabilities | |
| 191,807 | | |
| 191,807 | |
Total liabilities | |
| 11,003,147 | | |
| | |
Shareholders’ Equity: | |
| | | |
| | |
Common stock, $0.01 par value (100,000,000 shares authorized; 51,903,190 shares issued at March 31, 2022; 47,791,829 shares outstanding at March 31, 2022, actual and as adjusted) | |
| 528 | | |
| 528 | |
Preferred stock, $0.01 par value (2,000,000 shares authorized and no shares outstanding at March 31, 2022) | |
| — | | |
| — | |
Additional paid-in capital | |
| 1,423,679 | | |
| 1,423,679 | |
Unearned compensation | |
| (10,284 | ) | |
| (10,284 | ) |
Treasury stock, at cost (actual and as adjusted) | |
| (116,482 | ) | |
| (116,482 | ) |
Retained deficit | |
| (125,343 | ) | |
| (125,343 | ) |
Accumulated other comprehensive loss | |
| (78,237 | ) | |
| (78,237 | ) |
Total stockholders’ equity | |
| 1,093,861 | | |
| 1,093,861 | |
Total liabilities and shareholders’ equity | |
| 12,097,008 | | |
| | |
Capital Ratios(2) | |
| | | |
| | |
Common equity Tier 1 capital ratio | |
| 13.9 | % | |
| % | |
Tier 1 risk-based capital ratio | |
| 14.2 | % | |
| % | |
Total risk-based capital ratio | |
| 16.0 | % | |
| % | |
Tier 1 leverage ratio | |
| 10.3 | % | |
| % | |
(1) Represents the aggregate principal amount of the Notes, reduced
by the underwriting discount ($ ) and our estimated offering expenses ($ ).
(2) The as adjusted calculations for the risk-based capital ratios
for BHLB assume that the net proceeds from the sales of the Notes are invested in assets that carry a 20% risk weighting as of March 31,
2022.
(3) Represents the aggregate principal amount of the Notes, reduced
by the underwriting discount ($ ) and our estimated offering expenses ($ ).
DESCRIPTION
OF THE NOTES
We will issue the Notes under the Base Indenture,
as supplemented by the First Supplemental Indenture. You may request a copy of the Indenture from us as described under “Incorporation
of Certain Documents by Reference.” We have summarized the material terms of the Indenture and the Notes below, but the summary
does not purport to be complete and is subject to and qualified in its entirety by reference to the Indenture and the Notes. The following
description of the terms of the Indenture and the Notes supplements and, to the extent inconsistent therewith, replaces and supersedes
the description of the general terms and provisions of the subordinated debt securities in the accompanying prospectus.
You should read the Indenture and the Notes
because they, and not this description, define your rights as holders of the Notes. For purposes of this section, references to “BHLB,”
the “Company,” “we,” “us” and “our” include only BHLB and not any of its subsidiaries.
General
The Notes will be unsecured, subordinated obligations
of the Company and will mature on ,
2032 unless redeemed prior to such date in accordance with the provisions set forth below under “— Redemption.”
The Notes will be issued and may be transferred only in minimum denominations of $1,000 or integral multiples of $1,000 in excess thereof.
Unless previously redeemed prior to maturity, we
will repay the Notes at 100% of their principal amount, together with accrued and unpaid interest thereon to, but excluding, the Maturity
Date, at their maturity. We will pay principal of and interest on the Notes in U.S. dollars.
The Notes will constitute our unsecured debt obligations
and will rank equally among themselves, will rank equal in right of payment with our existing 6.875% fixed-to-floating rate subordinated
notes due 2027 (the “Existing Subordinated Notes”) and any of our future indebtedness the terms of which provide that such
indebtedness ranks equal in right of payment to indebtedness such as the Notes, will rank senior in right of payment to our junior subordinated
debentures and any of our future indebtedness the terms of which provide that such indebtedness ranks junior in right of payment to indebtedness
such as the Notes, and will rank junior in right of payment to any of our existing and future senior indebtedness as described below in
“— Subordination of the Notes.” No sinking fund will exist for the Notes, and no sinking fund payments will be made
with respect to the Notes. The Notes will not be convertible into or exchangeable for any other securities or property. Except as described
below under “— Clearance and Settlement,” the Notes will be issued only in book-entry form and will be represented by
one or more global notes registered in the name of Cede & Co., as the nominee of DTC.
The Notes offered hereby will be issued under the
Indenture. We may, from time to time, without notice to, or the consent of, the holders of the Notes, issue additional Notes ranking equally
with the Notes and identical to the Notes previously issued in all respects (except for the issue date, the issue price, the initial interest
accrual date and the first interest payment date following the issue date of such additional Notes) in order that such additional Notes
may be consolidated and form a single series with the Notes and have the same terms as to status, redemption or otherwise as the Notes.
However, no such additional Notes may be issued unless (1) they will be fungible with the Notes for U.S. securities law purposes;
(2) such additional Notes are issued pursuant to a “qualified reopening” of the Notes offered hereby for U.S. federal
income tax purposes, or such additional Notes are, and the Notes offered hereby were, issued without any original issue discount for U.S.
federal income tax purposes; and (3) the additional Notes have the same CUSIP number as the Notes offered hereby. No additional
Notes may be issued if any event of default has occurred and is continuing with respect to the Notes.
The Indenture contains no covenants or restrictions
restricting the incurrence of indebtedness or other obligations by us or by our subsidiaries, including the Bank. The Indenture contains
no financial covenants requiring us to achieve or maintain any minimum financial results relating to our financial position or results
of operations or meet or exceed any financial ratios, as a general matter or in order to incur additional indebtedness or obligations,
or to maintain any reserves. Moreover, neither the Indenture nor the Notes contain any covenants prohibiting us from, or limiting our
right to, incur additional indebtedness or obligations, to grant liens on our assets to secure our indebtedness or other obligations that
are senior in right of payment to the Notes, to repurchase our stock or other securities, including any of the Notes, or to pay dividends
or make other distributions to our shareholders. In addition, neither the Indenture nor the Notes contain any provision that would provide
protection to the holders of the Notes against a sudden and dramatic decline in our credit quality, including resulting from a merger,
takeover, recapitalization or similar restructuring or other events involving us or our subsidiaries that may adversely affect our credit
quality.
The Notes are not savings accounts, deposits or
other obligations of the Bank and are not insured or guaranteed by the FDIC or any other government agency or instrumentality. The Notes
are solely obligations of the Company and are neither obligations of, nor guaranteed by, the Bank or any of our other subsidiaries or
affiliates.
By acceptance of the Notes, each holder of the
Notes will be deemed to have agreed that no director, officer, employee, or shareholder of the Company, the Trustee or any affiliate of
the Company or the Trustee will have any personal liability with respect to the Company’s obligations under the Indenture or the
Notes.
Payment of the full principal amount of the Notes
will be due on , 2032 (the
“Maturity Date”), unless the Notes are redeemed prior to the Maturity Date.
Interest
Fixed Rate Period
From and including the date of issuance to, but
excluding, , 2027 (unless redeemed
prior to such date as contemplated below under “— Redemption”), which we refer to as the “fixed rate period,”
the Notes will bear interest at a rate of % per year. During the fixed rate period, interest on the Notes will
accrue from and including ,
2022, and will be payable semiannually in arrears on and
of each year during the fixed rate period, each a “fixed period interest payment
date,” commencing on ,
2022. During the fixed rate period, interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.
Dollar amounts resulting from that calculation will be rounded to the nearest cent, with one-half cent being rounded upward. The interest
payable on the Notes on any fixed period interest payment date will, except as noted below, be paid to the person in whose name the Notes
are registered at the close of business on the 15th calendar day (whether or not a business day (as defined below)) immediately preceding
the fixed period interest payment date. If any fixed period interest payment date for the Notes or the date for the payment of principal
for the Notes occurring during the fixed rate period falls on a day that is not a business day, the Company will postpone the interest
or principal payment to the next succeeding business day, but the payments made on such dates will be treated as being made on the date
that the payment was first due and the holders of the Notes will not be entitled to any further interest, principal or other payments
with respect to such postponements.
Floating Rate Period
From and including
, 2027 to, but excluding, the Maturity Date (unless redeemed prior to such date as
contemplated below under “— Redemption”), which we refer to as the “floating rate period,” the Notes will
bear interest at a floating rate per year equal to the Benchmark (which is expected to be Three-Month Term SOFR), plus
basis points. Notwithstanding the foregoing, if the Benchmark is less than zero, the
Benchmark will be deemed to be zero.
During the floating rate period, interest on the
Notes will accrue from and including ,
2027 and will be payable quarterly in arrears on ,
, and
of each year (each a “floating period interest payment date” and, together
with any fixed period interest payment date, an “Interest Payment Date”), commencing on
, 2027, and interest will be computed on the basis of a 360-day year and the actual
number of days elapsed. Dollar amounts resulting from that calculation will be rounded to the nearest cent, with one-half cent being rounded
upward.
For the purpose of calculating the interest on
the Notes for each floating rate interest period during the floating rate period when the Benchmark is Three-Month Term SOFR, “Three-Month
Term SOFR” means the rate for Term SOFR for a tenor of three months that is published by the Term SOFR Administrator at the
Reference Time for any floating rate interest period, as determined by the calculation agent after giving effect to the Three-Month Term
SOFR Conventions. All percentages used in or resulting from any calculation of Three-Month Term SOFR will be rounded, if necessary,
to the nearest one-hundred-thousandth of a percentage point, with 0.000005% rounded up to 0.00001%. When we use the term “floating
rate interest period” we mean the period from and including the immediately preceding floating period interest payment date in respect
of which interest has been paid or duly provided for, to, but excluding, the applicable floating period interest payment date or Maturity
Date or date of earlier redemption, if applicable (except that the first floating rate interest period will commence on
, 2027). See “— Calculation Agent” below.
As used herein:
“Benchmark” means, initially, Three-Month
Term SOFR; provided that, if the calculation agent determines on or prior to the Reference Time for any floating rate interest
period that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Three-Month Term SOFR
or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement for such floating rate interest
period and any subsequent floating rate interest periods.
“Corresponding Tenor” means (i) with
respect to Term SOFR, three months, and (ii) with respect to a Benchmark Replacement, a tenor (including overnight) having approximately
the same length (disregarding business day adjustment) as the applicable tenor for the then-current Benchmark.
“FRBNY’s Website” means the website
of the Federal Reserve Bank of New York (the “FRBNY”) at http://www.newyorkfed.org, or any successor source. The foregoing
Internet website is an inactive textual reference only, meaning that the information contained on the website is not part of this prospectus
supplement or the accompanying prospectus or incorporated by reference herein or therein.
“Reference Time” with respect to any
determination of the Benchmark means (i) if the Benchmark is Three-Month Term SOFR, the time determined by the calculation agent
after giving effect to the Three-Month Term SOFR Conventions, and (ii) if the Benchmark is not Three-Month Term SOFR, the time determined
by the calculation agent after giving effect to the Benchmark Replacement Conforming Changes.
“Relevant Governmental Body” means
the Federal Reserve and/or the FRBNY, or a committee officially endorsed or convened by the Federal Reserve and/or the FRBNY or any successor
thereto.
“SOFR” means the secured overnight
financing rate published by the FRBNY, as the administrator of the Benchmark (or any successor administrator), on the FRBNY’s Website.
“Term SOFR” means the forward-looking
term rate for the applicable Corresponding Tenor based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Term SOFR Administrator” means any
entity designated by the Relevant Governmental Body as the administrator of Term SOFR (or any successor administrator).
“Three-Month Term SOFR Conventions”
means any determination, decision, or election with respect to any technical, administrative, or operational matter (including with respect
to the manner and timing of the publication of Three-Month Term SOFR, or changes to the definition of “floating rate interest period,”
timing and frequency of determining Three-Month Term SOFR with respect to each floating rate interest period and making payments of interest,
rounding of amounts or tenors, and other administrative matters) that the calculation agent determines may be appropriate to reflect the
use of Three-Month Term SOFR as the Benchmark in a manner substantially consistent with market practice (or, if the calculation agent
determines that adoption of any portion of such market practice is not administratively feasible or if the calculation agent determines
that no market practice for the use of Three-Month Term SOFR exists, in such other manner as the calculation agent determines is reasonably
necessary).
The terms “Benchmark Replacement Conforming
Changes,” “Benchmark Replacement Date,” “Benchmark Replacement,” “Benchmark Replacement Adjustment,”
and “Benchmark Transition Event” have the meanings set forth under the heading “— Effect of Benchmark Transition
Event” below.
Notwithstanding the foregoing paragraphs related
to the determination of interest, if the calculation agent determines on or prior to the relevant Reference Time that a Benchmark Transition
Event and its related Benchmark Replacement Date have occurred with respect to Three-Month Term SOFR, then the provisions set forth under
the heading “— Effect of Benchmark Transition Event,” which we refer to as the “benchmark transition provisions,”
will thereafter apply to all determinations of the interest rate on the Notes for each floating rate interest period. In accordance with
the benchmark transition provisions, if the calculation agent determines that a Benchmark Transition Event and its related Benchmark Replacement
Date have occurred on or prior to the Reference Time in respect of any floating rate interest period during the floating rate period,
then the Benchmark Replacement will replace the then-current Benchmark for all purposes relating to the Notes during such floating rate
interest period and the remainder of the floating rate period.
Absent manifest error, the calculation agent’s
determination of the interest rate for a floating rate interest period for the Notes will be binding and conclusive on the holders of
the Notes and the Trustee. The Trustee will have no duty to confirm or verify any such calculation. By its acquisition of the Notes, each
holder of Notes (including each beneficial owner) acknowledges, accepts, consents to and agrees to be bound by the calculation agent’s
determination of interest rate for each floating rate interest period, including the calculation agent’s determination of any Benchmark
Replacement Conforming Changes, Benchmark Replacement Date, Benchmark Replacement, Benchmark Replacement Adjustment or Benchmark Transition
Event, including as may occur without any prior notice from the Company or the calculation agent and without the need for the Company
or the calculation agent to obtain any further consent from any holder. The calculation agent’s determination of any interest rate,
and its calculation of interest payments, for any floating rate interest period, will be maintained on file at the calculation agent’s
principal offices and will be made available by the Company to any holder of the Notes upon request. The calculation agent will provide
the Company and the Trustee with written notice of the interest rate in effect on the Notes promptly after the Reference Time (or such
other date of determination for the applicable Benchmark).
If the then-current Benchmark is Three-Month Term
SOFR, the calculation agent will have the right to establish the Three-Month Term SOFR Conventions, and if any of the foregoing provisions
concerning the calculation of the interest rate and interest payments during the floating rate period are inconsistent with any of the
Three-Month Term SOFR Conventions determined by the calculation agent, then the relevant Three-Month Term SOFR Conventions will apply.
Furthermore, if the calculation agent determines that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred
with respect to Three-Month Term SOFR at any time when any of the Notes are outstanding, then the foregoing provisions concerning the
calculation of the interest rate and interest payments during the floating rate period will be modified in accordance with the benchmark
transition provisions.
When we use the term “business day,”
we mean any day other than a Saturday or Sunday, that is not a day on which banking institutions are generally authorized or required
by law, regulation or executive order to be closed in The City of New York, New York or, with respect to payments, the place of payment.
If any floating period interest payment date or
the Maturity Date for the Notes falls on a day that is not a business day, the Company will postpone the interest payment or the payment
of principal and interest at maturity to the next succeeding business day (and any payment made on such date shall be treated as being
made on the date that the payment was first due and no interest on such payment will accrue for the period from and after such floating
period interest payment date), unless, with respect to a floating period interest payment date only, such day falls in the next calendar
month, in which case the floating period interest payment date will instead be the immediately preceding day that is a business day, and
interest will accrue to, but excluding, such floating period interest payment date as so adjusted.
The interest payable on the Notes on any floating
period interest payment date, subject to certain exceptions, will be paid to the person in whose name the Notes are registered at the
close of business on the 15th calendar day (whether or not a business day) immediately preceding the floating period interest payment
date. Payments will include interest accrued to, but excluding, the relevant floating period interest payment date. However, interest
that the Company pays on the Maturity Date will be paid to the person to whom the principal will be payable.
Principal and interest on the Notes will be made
in U.S. dollars at an office or agency of the Company designated for such purpose, which will initially be the corporate trust office
of the Trustee.
Subordination of the Notes
Our obligation to make any payment on account of
the principal of, or interest on, the Notes will be subordinate and junior in right of payment to the prior payment in full of all of
our senior indebtedness. “Senior Debt,” which we also refer to as “senior indebtedness,” is defined in the Indenture
to mean all of the Company’s:
| • | indebtedness for borrowed or purchased money, whether or not evidenced by bonds, debentures, notes, or other written instruments,
including any obligations of the Company to general creditors or trade creditors; |
| • | obligations under letters of credit; |
| • | indebtedness or other obligations with respect to commodity contracts, interest rate and currency swap agreements, cap, floor, and
collar agreements, currency spot and forward contracts, and other similar agreements or arrangements designed to protect against fluctuations
in currency exchange or interest rates; and |
| • | guarantees, endorsements (other than by endorsement of negotiable instruments for collection in the ordinary course of business),
or other similar contingent obligations in respect of obligations of others of a type described in clauses (i), (ii), and (iii), whether
or not such obligation is classified as a liability on a balance sheet prepared in accordance with accounting principles generally accepted
in the United States; |
in each case, whether outstanding on the date of the Indenture or arising
after that time, and other than obligations ranking on a parity with the Notes or ranking junior to the Notes. Notwithstanding the foregoing,
if the Federal Reserve (or other competent regulatory agency or authority) promulgates any rule or issues any interpretation that
defines general creditor(s), the main purpose of which is to establish criteria for determining whether the subordinated debt of a bank
holding company is to be included in its capital, then the term “general creditors” as used in the definition of “Senior
Debt” in the Indenture will have the meaning as described in that rule or interpretation.
In the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition, or other similar proceeding relating to us or our property, any proceeding for
our liquidation, dissolution, or other winding up, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy
proceedings, any assignment by us for the benefit of creditors or any other marshalling of our assets, all of our obligations to holders
of our Senior Debt will be entitled to be paid in full before any payment or distribution, whether in cash, securities or other property,
can be made on account of the principal or interest on the Notes. Only after payment in full of all amounts owing with respect to Senior
Debt will the holders of the Notes, together with the holders of any of our obligations ranking on a parity with the Notes, be entitled
to be paid from our remaining assets the amounts due and owing on account of unpaid principal of (and premium, if any) and interest on
the Notes. If, notwithstanding the foregoing, the holders of the Notes receive for any reason any payment on the Notes or other distributions
of our assets with respect to the Notes before all of our senior indebtedness is paid in full, the holders of the Notes will be required
to return that payment or distribution to the trustee or other representative on behalf of the holders of our Senior Debt for application
to the payment of all Senior Debt remaining unpaid to the extent necessary to pay all such Senior Debt in full.
In the event and during the continuation of any
default in the payment of the principal of or any premium or interest on any Senior Debt beyond any applicable grace period with respect
to such Senior Debt, or in the event that any event of default with respect to any Senior Debt shall have occurred and be continuing permitting
the holders of such Senior Debt (or the trustee on behalf of the holders of such Senior Debt) to declare such Senior Debt due and payable
prior to the date on which it would otherwise have become due and payable, unless and until such event of default shall have been cured
or waived or shall have ceased to exist and such acceleration shall have been rescinded or annulled, or in the event any judicial proceeding
shall be pending with respect to any such default in payment or event of default, then no payment shall be made by us on account of the
principal of or any premium or interest on the Notes or on account of the purchase or other acquisition of any Notes.
By reason of the above subordination in favor of
the holders of our senior indebtedness, in the event of our bankruptcy or insolvency, holders of our senior indebtedness may receive more,
ratably, and holders of the Notes may receive less, ratably, than our other creditors.
Neither the Notes nor the Indenture contains any
limitation on the amount of senior indebtedness or other obligations ranking senior to or equally with the indebtedness evidenced by the
Notes that we, the Bank or any of our other subsidiaries may incur. The Notes will be effectively subordinate to all of the existing and
future indebtedness and liabilities, including deposit liabilities, of our subsidiaries, including the Bank. As of March 31, 2022,
on a consolidated basis, our outstanding debt and deposits totaled approximately $10.8 billion. In addition, as of March 31,
2022, we (at the holding company level only) had no indebtedness that would rank senior to the Notes, $75.0 million of indebtedness
that would rank pari passu to the Notes and $22.9 million of indebtedness that would rank junior to the Notes.
All liabilities of the Bank, including deposits,
and our other subsidiaries, including each subsidiary’s liabilities to general creditors arising during its ordinary course of business
or otherwise, will be effectively senior in right of payment to the Notes to the extent of the assets of such subsidiary because, as a
stockholder of the subsidiary, we do not have any rights to the assets of the subsidiary except if the subsidiary declares a dividend
payable to us or if there are assets of the subsidiary remaining after it has discharged its liabilities to its creditors in connection
with its liquidation.
As of March 31, 2022, we had $75.0 million
of outstanding subordinated notes to which the Notes will rank equally in right of payment. In addition, we may incur other indebtedness
and obligations, the terms of which may provide that such indebtedness ranks either equally with or junior in right of payment to the
Notes or promissory notes, bonds, debentures and other evidences of indebtedness of a type that includes the Notes. As discussed above,
in the event of our insolvency, bankruptcy, receivership, liquidation or other marshalling of our assets, the indebtedness and obligations
ranking equally with the Notes will participate ratably in any of our assets remaining after the payment in full of all of our senior
indebtedness. In such circumstances, our indebtedness and other obligations junior in right of payment to the Notes will not be entitled
to receive any payments until the Notes and all of our indebtedness and obligations ranking equally in right of payment to the Notes have
been paid in full.
Over the term of the Notes, we will need to
rely primarily on dividends paid to us by the Bank, which is a regulated financial institution, for the funds necessary to pay the
interest on our outstanding debt obligations and to make dividends and other payments on our other securities outstanding now or in
the future. With respect to the payment of the principal of the Notes at their maturity, we may rely on the funds we receive from
dividends paid to us by our subsidiaries, but will likely have to rely on the proceeds of borrowings and other securities we sell to
pay the principal amount of the Notes. Regulatory rules may restrict the Bank’s ability to pay dividends or make other
distributions to us or to provide funds to us by other means. Currently, the approval of both the Commissioner and the FDIC is
required for the Bank to pay a dividend from its surplus account, which was the case during 2021 for dividends from the Bank to the
Company, and which is expected to be the case for the remainder of 2022. As a result of the foregoing, with respect to the assets of
each of our subsidiaries, our creditors (including the holders of the Notes) are structurally subordinated to the prior claims of
creditors of any such subsidiary, including the depositors of the Bank, except to the extent that we may be a creditor with
recognized claims against any such subsidiary.
Redemption
We may redeem the Notes, at our sole option, beginning
with the Interest Payment Date of ,
2027 and on any Interest Payment Date thereafter, in whole or in part, at a redemption price equal to 100% of the principal amount of
the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the date of redemption, subject to prior approval of the
Federal Reserve, to the extent that such approval is then required under the rules of the Federal Reserve. If we elect to redeem
the Notes, we will be required to notify the Trustee of the aggregate principal amount of Notes to be redeemed and the redemption date.
Either the Company or the Trustee on behalf of and at the request of the Company will provide notice of redemption to the holders of the
Notes at least 30 and not more 60 days prior to the redemption date, in the manner provided in the Indenture. Any such redemption may
be subject to the satisfaction of one or more conditions precedent set forth in the applicable notice of redemption. If fewer than all
of the Notes are to be redeemed, the selection of Notes to be redeemed will occur in accordance with the rules of DTC (or, in the
case of any certificated Notes, on a pro rata basis or by lot). The Notes are not subject to repayment at the option of the holders.
The Notes may not otherwise be redeemed by us prior to the scheduled maturity of the Notes, except we may, at our sole option, redeem
the Notes at any time before the scheduled maturity of the Notes in whole, but not in part, upon or after the occurrence of any of the
following:
(1) a
“Tax Event,” which is defined in the Indenture to mean the receipt by us of an opinion from independent tax counsel to the
effect that, as a result of (a) an amendment to or change (including any announced prospective amendment or change) in any law, treaty,
statute or code, or any regulation thereunder, of the United States or any of its political subdivisions or taxing authorities, (b) a
judicial decision, administrative action, official administrative pronouncement, ruling, regulatory procedure, regulation, notice or announcement,
including any notice or announcement of intent to adopt or promulgate any ruling, regulatory procedure or regulation (any of the foregoing,
an “administrative or judicial action”), (c) an amendment to or change in any official position with respect to, or any
interpretation of, an administrative or judicial action or a law or regulation of the United States that differs from the previously generally
accepted position or interpretation, or (d) a threatened challenge asserted in writing in connection with an audit of our federal
income tax returns or positions or a similar audit of any of our subsidiaries or a publicly known threatened challenge asserted in writing
against any other taxpayer that has raised capital through the issuance of securities that are substantially similar to the Notes, in
each case, occurring or becoming publicly known on or after the date of original issuance of the Notes, there is more than an insubstantial
increase in the risk that the interest paid by us on the Notes is not, or within 90 days of receipt of such opinion of tax counsel,
will not be, deductible by us, in whole or in part, for U.S. federal income tax purposes;
(2) a
“Tier 2 Capital Event,” which is defined in the Indenture to mean the Company’s good faith determination that, as a
result of (a) any amendment to, or change in, the laws, rules or any regulations of the United States or any agency or instrumentality
of the United States, including the Federal Reserve and other federal bank regulatory agencies, or political subdivision in or of the
United States that is enacted or becomes effective after the original issue date of the Notes, (b) any proposed changes in those
law, rules or regulations that is announced or becomes effective after the original issue date of the Notes, or (c) any official
administrative pronouncement or judicial decision or administrative action or other official pronouncement interpreting or applying
such laws, rules, regulations, policies or guidelines with respect thereto that is announced on or after the date of original issuance
of the Notes, there is more than an insubstantial risk that the Company will not be entitled to treat the Notes as Tier 2 capital (or
its then equivalent if we were subject to such capital requirement) for purposes of capital adequacy guidelines of the Federal Reserve
(or any successor regulatory authority with jurisdiction over bank holding companies), as then in effect and applicable to us; or
(3) our
becoming required to register as an investment company pursuant to the Investment Company Act.
Any such redemption of the Notes will be at a redemption
price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the date
of redemption. Notwithstanding the foregoing, installments of interest on any Notes that are due and payable on Interest Payment Dates
falling on or prior to the applicable date of redemption will be payable on such Interest Payment Dates to the registered holders at the
close of business on the relevant record dates in accordance with the Notes and the Indenture.
The Notes Are Intended to Qualify as Tier 2 Capital
We intend to treat the Notes as Tier 2 capital
under the capital adequacy rules established by the Federal Reserve for bank holding companies, as the same may be amended or supplemented
from time to time. The rules set forth specific criteria for instruments to qualify as Tier 2 capital. Among other things, the Notes
must:
| • | have a minimum original maturity of at least five years; |
| • | be subordinated to depositors and general creditors, which, in our case, will be to the holders of our senior indebtedness; |
| • | not contain provisions permitting the holders of the Notes to accelerate payment of principal prior to maturity except in the event
of receivership, insolvency, liquidation or similar proceedings of the institution; |
| • | only be callable after a minimum of five years following issuance, except upon certain special events, and, in any case, subject
to obtaining the prior approval of the Federal Reserve to the extent such approval is then required under the rules of the Federal
Reserve; and |
| • | unless the Federal Reserve authorizes us to do otherwise in writing, not be redeemed or repurchased unless they are replaced with
an equivalent amount of other Tier 2 capital instruments or we can demonstrate to the satisfaction of the Federal Reserve that following
redemption, we will continue to hold capital commensurate with our risk. |
Events of Default; Limitation on Suits
Under the Indenture, an event of default permitting
acceleration of the maturity of the Notes will occur with respect to the Notes upon any one of the following events: (1) a court
having jurisdiction in the premises entering into a decree or order for relief in respect of us or a principal subsidiary bank of ours
in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of us or a principal subsidiary bank of ours being appointed for us or
for any substantial part of our property or for a principal subsidiary bank of ours, or a court or a bank regulatory authority having
jurisdiction in the premises, appointing a receiver or similar official, or ordering the winding-up or liquidation of the affairs
of us or a principal subsidiary bank of ours, and such decree or order remaining unstayed and in effect for a period of 60 consecutive
days; or (2) we or a principal subsidiary bank of ours commencing a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consenting to the entry of an order for relief in any involuntary case under any such
law, or we or a principal subsidiary bank of ours consenting to the appointment of or being taken possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or similar official) of us or a principal subsidiary bank of ours or for any substantial part
of its property, or making any general assignment for the benefit of our creditors, or failing generally to pay our debts as they become
due or taking any corporate action in furtherance of any of the foregoing.
The term “principal subsidiary bank”
means each of (1) any bank subsidiary the consolidated assets of which as set forth in the most recent statement of condition of
such bank subsidiary constitute 40% or more of our consolidated assets as determined from our most recent quarterly balance sheet or (2) any
other bank subsidiary designated as a “principal subsidiary bank” by our Board of Directors; provided that if the Federal
Reserve notifies us that our bank subsidiary that is a principal subsidiary bank applying the tests in clause (1) or (2) above
does not qualify as a “major subsidiary depository institution” within the requirements of the Federal Reserve’s risk-based
capital guidelines or regulations applicable to bank holding companies, such bank subsidiary will not be a principal subsidiary bank from
and after the time we receive from the Federal Reserve such a notice. Currently, the Bank is our only principal subsidiary bank and therefore
is a “principal subsidiary bank.”
If an event of default permitting acceleration
of the maturity of the Notes occurs and is continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount
of the outstanding Notes may declare the principal of all the Notes to be due and payable immediately, by a notice in writing to us (and
to the Trustee if given by the holders), and upon any such declaration such principal or such lesser amount shall become immediately due
and payable. The foregoing provision would, in the event of bankruptcy or insolvency involving the Company or the Bank, be subject as
to enforcement to the broad equity powers of a federal bankruptcy court and to the determination by that court of the nature and status
of the payment claims of the holders of the Notes.
At any time after a declaration of acceleration
has been made with respect to the Notes, and before a judgment or decree for payment of the money due has been obtained by the Trustee
as provided in the Indenture, the Holders of a majority in principal amount of the outstanding Notes may waive all defaults and may rescind
and annul such declaration and the consequences of the event of default if (a) the Company has paid or deposited with the Trustee
a sum sufficient to pay all overdue interest on all Notes, the principal of (and premium, if any, on) any Notes which have become due
otherwise than by such declaration of acceleration and any interest on such Notes at the rate or rates prescribed herein and in the Notes,
and sums paid or advanced by the Trustee under this Indenture and the reasonable compensation, expenses, disbursements, and advances of
the Trustee, its agents, and counsel; and (b) all defaults with respect to the Notes, other than the non-payment of the
principal of the Notes which has become due solely by such acceleration, have been cured or waived.
The Indenture provides that the holders of not
less than a majority in principal amount of the outstanding Notes may, on behalf of all holders of Notes, waive any past default with
respect to the Notes and the consequences of default, other than (i) a continuing default in the payment of principal of or interest
on any Note, or (ii) any breach in respect of a covenant or provision of the Indenture that cannot be modified or amended without
the consent of the holder of each outstanding Note.
If we default in our obligation to pay any interest
on the Notes when due and payable and such default continues for a period of 30 days, or if we default in our obligation to pay the principal
amount (or premium, if any) due upon maturity and such default continues for a period of 30 days, or if we default in the performance,
or breach, of any covenant or warranty we are subject to under the Indenture (other than those covenants and warranties a default in the
performance of which or breach of which is expressly addressed elsewhere in the Indenture or which is expressly included solely for the
benefit of a different series of securities), and such default continues for a period of 30 days after written notice has been given by
the Trustee to us or to us and the Trustee by the holders of at least 25% in principal amount of the outstanding Notes, then the Trustee
may demand that we pay to it, for the benefit of the holders of such Notes, the whole amount then due and payable on such Notes for principal
and any premium and interest (and additional interest and costs and expenses of collection, if applicable). If we fail to pay such amounts
immediately upon such demand, the Trustee, in its own name and as Trustee, may institute a judicial proceeding for the collection of the
sums so due and unpaid. If an event of default occurs and is continuing, the Trustee may, in its discretion, proceed to protect and enforce
its rights and the rights of the holders of Notes by such appropriate judicial proceedings as the Trustee may deem most effectual to protect
and enforce any such rights. The Trustee and holders of the Notes may not accelerate the maturity of the Notes, except upon our or our
principal subsidiary bank’s bankruptcy, insolvency, liquidation, receivership or similar events as described above.
No holder of Notes will have any right to institute
any proceeding, judicial or otherwise, with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other
remedy under the Indenture, unless:
| • | such holder has previously given written notice to the Trustee of a continuing event of default with respect to the Notes; |
| • | the holders of not less than 25% in principal amount of the outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such event of default in its own name as Trustee under the Indenture; |
| • | such holder or holders have offered and, if requested, provided to the Trustee security or indemnity satisfactory to the Trustee against
the costs, expenses, and liabilities to be incurred in complying with such request; |
| • | the Trustee for 60 days after its receipt of such notice, request, and offer, or provision, of indemnity has failed to institute
any such proceeding; and |
| • | no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the holders of a majority
in principal amount of the outstanding Notes. |
These limitations do not apply to a suit instituted
by a holder of Notes for the enforcement of payment of the principal of or interest on the Notes on or after the Maturity Date.
The Indenture provides that the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the holders of Notes
unless such holders have offered and, if requested, provided to the Trustee reasonable indemnity or security satisfactory to the Trustee
against the costs, expenses and liabilities that may be incurred by it in complying with such request or direction. Subject to certain
provisions in the Indenture, the holders of a majority in principal amount of the Notes outstanding from time to time will have the right
to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Notes.
Defeasance
Our obligations will be deemed to have been paid
and discharged if the following applicable conditions have been satisfied:
| • | we have irrevocably deposited or caused to be deposited in trust with the Trustee money or U.S. government obligations (or a combination
of money and U.S. government obligations) sufficient to pay and discharge the entire indebtedness on all outstanding Notes for principal
and interest to the Maturity Date or the date of redemption; |
| • | no event of default or event which with notice or lapse of time or both would become an event of default with respect to the Notes
shall have occurred and be continuing (A) on the date of such deposit or (B) insofar as a bankruptcy-related event of default
or event which with notice or lapse of time or both would become an event of default is concerned, at any time during the period ending
on the 120th day after the date of such deposit or, if longer, ending on the day following the expiration of the preference period applicable
to the Company under federal law in respect of such deposit (it being understood that the condition in this clause (B) will not be
deemed satisfied until the expiration of such period); |
| • | the defeasance or covenant defeasance of the Notes will not cause the Trustee to have a conflicting interest for purposes of the Trust
Indenture Act with respect to any securities issued under the base indenture or result in the trust arising from such deposit to constitute,
unless it is qualified as, a regulated investment company under the Investment Company Act; |
| • | the defeasance or covenant defeasance of the Notes will not result in a breach or violation of, or constitute a default under, the
Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; |
| • | the defeasance or covenant defeasance of the Notes will not cause the Notes, if they are then listed on a national securities exchange,
to be delisted; |
| • | in the event of a defeasance, we have delivered to the Trustee, an opinion of counsel stating that (x) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling, or (y) since the date of the Indenture there has been
a change in the applicable federal income tax law, in either case to the effect that, and based on such ruling or change such opinion
shall confirm that, the holders of the outstanding Notes will not recognize income, gain, or loss for federal income tax purposes as a
result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner, and at the same times as
would have been the case if such defeasance had not occurred; |
| • | in the event of a covenant defeasance, we will have delivered to the Trustee an opinion of counsel to the effect that the holders
of the outstanding Notes will not recognize income, gain, or loss for federal income tax purposes as a result of such covenant defeasance
and will be subject to federal income tax on the same amounts, in the same manner, and at the same times as would have been the case if
such covenant defeasance had not occurred; |
| • | we have delivered to the Trustee an opinion of counsel to the effect that (subject to customary qualifications and assumptions) after
the period described in the second bullet in this paragraph, the trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization, or similar laws affecting creditors’ rights generally; |
| • | such defeasance or covenant defeasance shall have been effected in compliance with any terms, conditions, or limitations which may
be imposed on the Company pursuant to the Indenture; and |
| • | we have delivered to the Trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent
provided for in the Indenture relating to the defeasance or covenant defeasance have been complied with. |
Upon our exercise of our option to effect covenant
defeasance, and subject to the conditions in the immediately preceding paragraph, we will not need to comply with certain restrictive
covenants, and the provisions of the Indenture will cease to be applicable with respect to an event of default under the Notes other than
an event of default due to our failure to pay the principal of or interest on the Notes when due.
Satisfaction and Discharge
We may discharge our obligations under the Indenture
and the Notes (except for certain surviving rights of the Trustee and our obligations in connection therewith) if: (a) all outstanding
Notes and all other outstanding notes issued under the Indenture (i) have been delivered to the Trustee for cancellation, or (ii) (1) have
become due and payable, (2) will become due and payable at their stated maturity within one year, or (3) are to be called for
redemption within one year under arrangements satisfactory to the Trustee for the giving of notice and redemption by the Trustee (and
in each case, we have irrevocably deposited with the Trustee an amount sufficient to pay and discharge the principal of (and premium,
if any) and interest on all outstanding Notes and any other sums due on the stated maturity date or redemption date, as the case may be);
(b) we have paid all other sums payable by us under the Indenture; (c) we have delivered irrevocable instructions to the Trustee
to apply the deposited cash and/or U.S. Government Obligations toward the payment of the Notes at maturity or on the redemption date,
as the case may be; and (d) we have delivered to the Trustee an officers’ certificate and opinion of counsel confirming that
all conditions precedent with respect to the satisfaction and discharge of the Indenture have been satisfied.
Consolidation, Merger and Sale of Assets
The Indenture provides that we may not consolidate
with or merge with or into, or convey, transfer or lease all or substantially all of our properties and assets to any person, or permit
any person to merge with or into the Company or convey, transfer or lease all or substantially all of its properties and assets to the
Company, unless:
| • | the person or entity formed by such consolidation or into which we are merged or the person or entity which acquires by conveyance,
transfer or lease substantially all of our properties and assets is a corporation organized and validly existing under the laws of the
United States or any state or the District of Columbia, and expressly assumes, by supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and interest on all of the outstanding
Notes and the performance and observance of all of the covenants of the Indenture to be performed or observed by us; |
| • | immediately after giving effect to such transaction, and treating any indebtedness that becomes an obligation of ours or our subsidiaries
as a result of such transaction as having been incurred by us or such subsidiary at the effective date of such transaction, no event of
default under the Indenture, or an event which, after notice or lapse of time or both, would become an event of default, will have occurred
and be continuing; and |
| • | we have complied with our obligations to deliver certain documentation to the Trustee, including an officers’ certificate and
opinion of counsel each stating that such proposed transaction and any supplemental indenture comply with the Indenture. |
Further Issues
We may, from time to time, without notice to or
the consent of the holders of the Notes, create and issue additional notes ranking equally with the Notes and with identical terms in
all respects (or in all respects except for the issue date, the issue price, the initial interest accrual date and the first interest
payment date following the issue date of such additional notes) in order that such additional notes may be consolidated and form a single
series with the Notes and have the same terms as to status, redemption or otherwise as the Notes, subject to the procedures of the DTC.
However, no such additional Notes may be issued unless (1) they will be fungible with the Notes for U.S. securities law purposes;
(2) such additional Notes are issued pursuant to a “qualified reopening” of the Notes offered hereby for U.S. federal
income tax purposes, or such additional Notes are, and the Notes offered hereby were, issued without any original issue discount for U.S.
federal income tax purposes; and (3) the additional Notes have the same CUSIP number as the Notes offered hereby. No additional
Notes may be issued if any event of default has occurred and is continuing with respect to the Notes.
Effect of Benchmark Transition Event
If the calculation agent determines that a Benchmark
Transition Event and its related Benchmark Replacement Date have occurred on or prior to the Reference Time in respect of any floating
rate interest period during the floating rate period, then the Benchmark Replacement will replace the then-current Benchmark for all purposes
relating to the Notes during such floating rate interest period and all subsequent floating rate interest periods. In connection with
the implementation of a Benchmark Replacement, the calculation agent will have the right to make Benchmark Replacement Conforming Changes
from time to time.
As used herein:
“Benchmark Replacement” means the Interpolated
Benchmark with respect to the then-current Benchmark, plus the Benchmark Replacement Adjustment for such Benchmark; provided that
if (i) the calculation agent cannot determine the Interpolated Benchmark as of the Benchmark Replacement Date or (ii) the then-current
Benchmark is Three-Month Term SOFR and a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect
to Three-Month Term SOFR (in which event no Interpolated Benchmark with respect to Three-Month Term SOFR will be determined), then “Benchmark
Replacement” means the first alternative set forth in the order below that can be determined by the calculation agent as of the
Benchmark Replacement Date:
1) Compounded
SOFR;
2) the
sum of: (a) the alternate rate that has been selected or recommended by the Relevant Governmental Body as the replacement for the
then-current Benchmark for the applicable Corresponding Tenor and (b) the Benchmark Replacement Adjustment;
3) the
sum of: (a) the ISDA Fallback Rate and (b) the Benchmark Replacement Adjustment; and
4) the
sum of: (a) the alternate rate that has been selected by the calculation agent as the replacement for the then-current Benchmark
for the applicable Corresponding Tenor, giving due consideration to any industry-accepted rate as a replacement for the then-current Benchmark
for U.S. dollar-denominated floating rate securities at such time, and (b) the Benchmark Replacement Adjustment.
“Benchmark Replacement Adjustment”
means the first alternative set forth in the order below that can be determined by the calculation agent as of the Benchmark Replacement
Date:
1) the
spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero),
that has been selected or recommended by the Relevant Governmental Body for the applicable Unadjusted Benchmark Replacement;
2) if
the applicable Unadjusted Benchmark Replacement is equivalent to the ISDA Fallback Rate, then the ISDA Fallback Adjustment; and
3) the
spread adjustment (which may be a positive or negative value or zero) that has been selected by the calculation agent, giving due consideration
to any industry-accepted spread adjustment or method for calculating or determining such spread adjustment, for the replacement of the
then-current Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated floating rate securities at such
time.
“Benchmark Replacement Conforming Changes”
means, with respect to any Benchmark Replacement, any technical, administrative, or operational changes (including, without limitation,
changes to the definition of “floating rate interest period,” timing and frequency of determining rates with respect to each
floating rate interest period and making payments of interest, rounding of amounts or tenors, and other administrative matters) that the
calculation agent determines may be appropriate to reflect the adoption of such Benchmark Replacement in a manner substantially consistent
with market practice (or, if the calculation agent determines that adoption of any portion of such market practice is not administratively
feasible or if the calculation agent determines that no market practice for use of the Benchmark Replacement exists, in such other manner
as the calculation agent determines is reasonably necessary).
“Benchmark Replacement Date” means
the earliest to occur of the following events with respect to the then-current Benchmark:
1) in
the case of clause (1) of the definition of “Benchmark Transition Event,” the relevant Reference Time in respect of any
determination;
2) in
the case of clause (2) or (3) of the definition of “Benchmark Transition Event,” the later of (a) the date
of the public statement or publication of information referenced therein and (b) the date on which the administrator of the Benchmark
permanently or indefinitely ceases to provide the Benchmark; or
3) in
the case of clause (4) of the definition of “Benchmark Transition Event,” the date of the public statement or publication
of information referenced therein.
For the avoidance of doubt, if the event giving
rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination,
the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination.
“Benchmark Transition Event” means
the occurrence of one or more of the following events with respect to the then-current Benchmark:
1) if
the Benchmark is Three-Month Term SOFR, (a) the Relevant Governmental Body has not selected or recommended a forward-looking term
rate for a tenor of three months based on SOFR, (b) the development of a forward-looking term rate for a tenor of three months
based on SOFR that has been recommended or selected by the Relevant Governmental Body is not complete or (c) we determine that the
use of a forward-looking rate for a tenor of three months based on SOFR is not administratively feasible;
2) a
public statement or publication of information by or on behalf of the administrator of the Benchmark announcing that such administrator
has ceased or will cease to provide the Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication,
there is no successor administrator that will continue to provide the Benchmark;
3) a
public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark, the central bank for
the currency of the Benchmark, an insolvency official with jurisdiction over the administrator for the Benchmark, a resolution authority
with jurisdiction over the administrator for the Benchmark or a court or an entity with similar insolvency or resolution authority over
the administrator for the Benchmark, which states that the administrator of the Benchmark has ceased or will cease to provide the Benchmark
permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will
continue to provide the Benchmark; or
4) a
public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark announcing that the
Benchmark is no longer representative.
“Compounded SOFR” means the compounded
average of SOFRs for the applicable Corresponding Tenor, with the rate, or methodology for this rate, and conventions for this rate being
established by the calculation agent in accordance with:
1) the
rate, or methodology for this rate, and conventions for this rate selected or recommended by the Relevant Governmental Body for determining
Compounded SOFR; provided that:
2) if,
and to the extent that, the calculation agent determines that Compounded SOFR cannot be determined in accordance with clause (1) above,
then the rate, or methodology for this rate, and conventions for this rate that have been selected by the calculation agent giving due
consideration to any industry-accepted market practice for U.S. dollar-denominated floating rate securities at such time.
For the avoidance of doubt, the calculation of
Compounded SOFR will exclude the Benchmark Replacement Adjustment and the spread specified above.
“Interpolated Benchmark” with respect
to the Benchmark means the rate determined by the calculation agent for the Corresponding Tenor by interpolating on a linear basis between:
(i) the Benchmark for the longest period (for which the Benchmark is available) that is shorter than the Corresponding Tenor, and
(ii) the Benchmark for the shortest period (for which the Benchmark is available) that is longer than the Corresponding Tenor.
“ISDA” means the International Swaps
and Derivatives Association, Inc. or any successor.
“ISDA Definitions” means the 2006 ISDA
Definitions published by ISDA, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives
published from time to time.
“ISDA Fallback Adjustment” means the
spread adjustment (which may be a positive or negative value or zero) that would apply for derivatives transactions referencing the ISDA
Definitions to be determined upon the occurrence of an index cessation event with respect to the Benchmark for the applicable tenor.
“ISDA Fallback Rate” means the rate
that would apply for derivatives transactions referencing the ISDA Definitions to be effective upon the occurrence of an index cessation
date with respect to the Benchmark for the applicable tenor excluding the applicable ISDA Fallback Adjustment.
“Unadjusted Benchmark Replacement”
means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
The terms “Corresponding Tenor,” “FRBNY’s
Website,” “Reference Time,” “Relevant Governmental Body,” “SOFR” and “Term SOFR”
have the meanings set forth under the heading “— Floating Rate Period” above.
Determinations and Decisions
We and the calculation agent are expressly authorized
to make certain determinations, decisions, and elections under the terms of the Notes, including with respect to the use of Three-Month
Term SOFR as the Benchmark for the floating rate period and under the benchmark transition provisions. Any determination, decision, or
election that may be made by us or by the calculation agent under the terms of the Notes, including any determination with respect to
a tenor, rate, or adjustment or of the occurrence or non-occurrence of an event, circumstance, or date and any decision to take or refrain
from taking any action or any selection:
| • | will be conclusive and binding on the holders of the Notes, us (if we are not also making the decision) and the Trustee absent manifest
error; |
| • | if made by us, will be made in our sole discretion; |
| • | if made by a calculation agent other than us, will be made after consultation with us, and the calculation agent will not make any
such determination, decision, or election to which we reasonably object; and |
| • | notwithstanding anything to the contrary in the Indenture or the Notes, will become effective without consent from the holders of
the Notes or the Trustee or any other person. |
If the calculation agent fails to make any determination,
decision, or election that it is required to make under the terms of the applicable Notes, then we will make such determination, decision,
or election on the same basis as described above. In connection with such determination, decision, or election, the Company will be treated
as the calculation agent for all purposes under the terms of the Indenture. The Indenture provides that the Trustee will have no liability
relating to the calculation agent’s or our determination, decision, or election with respect to a tenor, rate, or adjustment or
of the occurrence or non-occurrence of an event, circumstance, or date and any decision to take or refrain from taking any action or any
selection related to rate-setting or with respect to any delay caused by the calculation agent’s failure to timely or appropriately
determine the rate of interest borne by the Notes.
Modification of the Indenture
The Indenture provides that we and the Trustee
may amend or supplement the Indenture or the Notes with, or, in certain cases, without the consent of the holders of a majority in principal
amount of the outstanding Notes; provided, that any amendment or waiver may not, without the consent of the noteholder of each outstanding
Note affected thereby:
| • | change the stated maturity of the principal of or interest on any Notes, reduce the principal amount thereof or rate or amount of
interest thereon, or change the currency in which such principal or interest is payable; |
| • | reduce the percentage in principal amount of Notes required to modify or amend the Indenture or for any waiver provided for in the
Indenture; |
| • | impair the right to institute suit for the enforcement of any payment on any Notes; |
| • | modify the provisions of the Indenture with respect to the subordination of any Notes in a manner adverse to the noteholders or adverse
to the capital treatment of the Notes; or |
| • | modify any of the provisions of the Indenture relating to the execution of supplemental indentures with the consent of noteholders
which are discussed in Section 9.2 of the Indenture or modify any provisions relating to the waiver by noteholders of past defaults
and compliance with covenants, except to increase any required percentage or to provide that other provisions of the Indenture cannot
be modified or waived without the consent of the noteholder of each outstanding Note affected thereby; or |
| • | modify or affect in any manner adverse to the holders of the Notes the terms and conditions of the Company’s obligation in respect
of the due and punctual payment of the principal of or premium or interest on the Notes. |
In addition, we and the Trustee may modify and
amend the Indenture without the consent of any holders of Notes for any of the following purposes:
| • | to evidence the succession of another corporation to the Company’s obligations in respect of the Indenture; |
| • | to evidence the acceptance of appointment by a successor trustee with respect to the Notes; |
| • | to add to the covenants for the benefit of the holders of the Notes or to surrender any right or power conferred upon the Company
in the Indenture or to make any change that does not adversely affect the rights of any holder of the Notes in any material respect; |
| • | to add events of default; |
| • | to cure any ambiguity, defect or inconsistency in the Indenture, provided that such change does not adversely affect the rights of
the holders of the Notes in any material respect; |
| • | to conform the text of the Indenture or the Notes to any provision of the “Description of Notes” in the prospectus supplement
applicable to the Notes at the time of the initial sale thereof; and |
| • | to secure the Notes or add obligors or collateral; |
| • | to establish the forms or terms of the securities of any series issued under the Indenture; |
| • | to provide for additional Notes; |
| • | to add to, change or eliminate any of the provisions of the Indenture, provided that any such addition, change or elimination shall
become effective only when there are no Notes entitled to the benefit of such provision outstanding, or to make any change that does not
adversely affect the rights of any holder of the Notes in any material respect; |
| • | to make certain permissible amendments to the provisions of the Indenture relating to the transfer and legending of Notes; |
| • | to qualify or maintain qualification of the Indenture under the Trust Indenture Act; |
| • | to provide for uncertificated securities in addition to certificated securities; or |
| • | to comply with the rules or regulations of any securities exchange or automated quotation system on which the Notes may be listed
or traded. |
The Trustee shall be entitled to receive an officers’
certificate and opinion of counsel confirming that all conditions precedent are satisfied with respect to any supplemental indenture,
that such supplemental indenture is authorized and permitted and that such supplemental indenture is the legal, valid and binding obligation
of BHLB, enforceable against it in accordance with its terms.
Calculation Agent
We will appoint a calculation agent for the Notes
(which may be us or an affiliate) prior to the commencement of the floating rate period. We expect to act as the initial calculation agent.
We may remove the calculation agent at any time. If the calculation agent is unable or unwilling to act as calculation agent or is removed
by us, we will promptly appoint a replacement calculation agent. If at any time there is no calculation agent appointed by us, then we
will be the calculation agent. The Indenture provides that the Trustee will not be under any duty to succeed to, assume or otherwise perform
any of the duties of the calculation agent, or to appoint a successor or replacement in the event of the calculation agent’s resignation
or removal or to replace the calculation agent in the event of a default, breach or failure of performance on the part of the calculation
agent with respect to the calculation agent’s duties under the Indenture.
Clearance and Settlement
DTC or any successor depositary will act as securities
depositary for the Notes. The Notes will be issued initially in the form of one or more fully registered global notes (each such global
note, a “global note”), registered in the name of DTC or its nominee and deposited with DTC or its designated custodian or
such other depositary as any officer of the Company may designate. No holder of any beneficial interest in any global note held on its
behalf by a depositary will have any rights under the indenture with respect to such global note, and such depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the owner of such global note for all purposes whatsoever. Beneficial
interests in the global notes will be represented through book-entry accounts of financial institutions acting on behalf of beneficial
owners as direct and indirect participants in DTC. Investors may not elect to receive a certificate representing their Notes while the
Notes are held by a depositary. Investors may elect to hold interests in the global notes through DTC either directly if they are participants
in DTC or indirectly through organizations that are participants in DTC.
The laws of some jurisdictions may require that
some purchasers of securities take physical delivery of securities in definitive form. These laws may impair the ability to transfer beneficial
interests in the Notes, so long as global notes represent the corresponding securities.
DTC has advised us that it is a limited-purpose
trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial
Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities
that its direct participants deposit with DTC. DTC also facilitates the post-trade settlement among participants of sales and other securities
transactions in deposited securities, through electronic computerized book-entry transfers and pledges between participants’ accounts.
This eliminates the need for physical movement of securities certificates. Direct participants include both U.S. and non-U.S. securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly owned subsidiary of
The Depository Trust & Clearing Corporation, which, in turn, is owned by a number of direct participants of DTC. Access to the
DTC system is also available to others, referred to as indirect participants, such as both U.S. and non-U.S. securities brokers and dealers,
banks, trust companies and clearing corporations that clear through or maintain a direct or indirect custodial relationship with a direct
participant. The rules applicable to DTC and its participants are on file with the SEC.
Purchases of securities under the DTC system must
be made by or through direct participants in DTC, who will receive a credit for the securities on DTC’s records. The ownership interest
of each beneficial owner of securities will be recorded on the direct or indirect participants’ records. Beneficial owners will
not receive written confirmation from DTC of their purchase. Beneficial owners are, however, expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their holdings, from the direct or indirect participant through
which the beneficial owner entered into the transaction. Under a book-entry format, holders may experience some delay in their receipt
of payments made with respect to the Notes, as such, the paying agent for the Notes will forward payments to Cede & Co., as nominee
for DTC. DTC will forward the payments to its participants, who will then forward them to indirect participants or holders. Beneficial
owners of securities other than DTC or its nominees will not be recognized by the relevant registrar, transfer agent, paying agent or
trustee as registered holders of the Notes entitled to the benefits of the Indenture. Beneficial owners that are not participants will
be permitted to exercise their rights only indirectly through and according to the procedures of participants and, if applicable, indirect
participants.
To facilitate subsequent transfers, all securities
deposited by direct participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such
other name as may be requested by an authorized representative of DTC. The deposit of securities with DTC and their registration in the
name of Cede & Co. or such other DTC nominee do not result in any change in beneficial ownership of those securities. DTC does
not have, and is not anticipated to have, any knowledge of the actual beneficial owners of the Notes, as DTC’s records reflect only
the identity of the direct participants to whose accounts the Notes are credited, which may or may not be the beneficial owners. The direct
and indirect participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of redemption notices and other communications
by DTC to direct participants, by direct participants to indirect participants, and by direct and indirect participants to beneficial
owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time
to time. If less than all of the securities of any class are being redeemed, DTC will determine the amount of the interest of each direct
participant to be redeemed in accordance with its then current procedures.
Neither DTC nor Cede & Co. (nor any other
DTC nominee) will consent or vote with respect to any securities unless authorized by a direct participant in accordance with DTC’s
procedures. Under its usual procedures, DTC mails an omnibus proxy to the issuer as soon as possible after the record date. The omnibus
proxy assigns Cede & Co.’s consenting or voting rights to those direct participants to whose accounts securities are credited
on the record date (identified in a listing attached to the omnibus proxy).
DTC may discontinue providing its services as securities
depositary with respect to the Notes at any time by giving reasonable notice to the issuer or its agent. Under these circumstances, in
the event that a successor securities depositary is not obtained, certificates for the Notes are required to be printed and delivered.
We may decide to discontinue the use of the system of book-entry-only transfers through DTC (or a successor securities depositary). In
that event, certificates for the Notes will be printed and delivered to DTC.
As long as DTC or its nominee is the registered
owner of the global note representing the Notes, DTC or its nominee, as the case may be, will be considered the sole owner and holder
of that global note and all Notes represented by that global note for all purposes under the instruments governing the rights and obligations
of holders of such securities. Except in the limited circumstances referred to in the accompanying prospectus, owners of beneficial interests
in the global note:
| • | will not be entitled to have such global note or the Notes represented by that global note registered in their names; |
| • | will not receive or be entitled to receive physical delivery of securities certificates in exchange for beneficial interests; and |
| • | will not be considered to be owners or holders of that global note or any Notes represented by that global note for any purpose under
the instruments governing the rights and obligations of holders of such securities. |
Payment of redemption proceeds and payments of
principal of, and interest on, the Notes represented by the global note and all transfers and deliveries of such global note will be made
to DTC or its nominee, as the case may be, as the registered holder of the global note. DTC’s practice is to credit its direct participants’
accounts upon DTC’s receipt of funds and corresponding detail information from the issuer or its agent, on the payment date in accordance
with their respective holdings shown on DTC’s records. Payments by participants to beneficial owners of the Notes will be governed
by standing instructions and customary practices of those participants, as is the case with securities held for the accounts of customers
in bearer form or registered in “street name,” and will be the responsibility of that participant and not of DTC, the depositary,
the issuer, the Trustee, the paying agent or any of their respective agents, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of redemption proceeds and payments of principal of, or interest on, the Notes to Cede &
Co. (or such other nominee as may be requested by an authorized representative of DTC) are the responsibility of the issuer or its agent,
disbursement of such payments to direct participants will be the responsibility of DTC, and disbursement of such payments to the beneficial
owners of the Notes will be the responsibility of direct and indirect participants.
Ownership of beneficial interests in the global
note will be limited to participants or persons that may hold beneficial interests through institutions that have accounts with DTC or
its nominee. Ownership of beneficial interests in the global note will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by DTC or its nominee, with respect to participants’ interests, or any participant,
with respect to interests of persons held by the participant on their behalf. Payments, transfers, deliveries, exchanges, redemptions
and other matters relating to beneficial interests in the global note may be subject to various policies and procedures adopted by DTC
from time to time. None of the Company, the Trustee or any agent for any of them will have any responsibility or liability for any aspect
of DTC’s or any direct or indirect participant’s records relating to, or for payments made on account of, beneficial interests
in the global note, or for maintaining, supervising or reviewing any of DTC’s records or any direct or indirect participant’s
records relating to these beneficial ownership interests.
Although DTC has agreed to the foregoing procedures
in order to facilitate transfer of interests in the global note among participants, DTC is under no obligation to perform or continue
to perform these procedures, and these procedures may be discontinued at any time. Neither the Company nor the Trustee nor any agent for
either of them will have any responsibility for the performance by DTC or its direct participants or indirect participants under the rules and
procedures governing DTC or the standby instructions or customary procedures of the participants.
Because DTC can act only on behalf of direct participants,
who in turn act only on behalf of direct or indirect participants, and certain banks, trust companies and other persons approved by it,
the ability of a beneficial owner of the Notes to pledge them to persons or entities that do not participate in the DTC system may be
limited due to the unavailability of physical certificates for the Notes.
DTC has advised us that it will take any action
permitted to be taken by a registered holder of any securities under the Indenture only at the direction of one or more participants to
whose accounts with DTC the relevant securities are credited.
The information in this section concerning DTC
and its book-entry system has been obtained from sources that we believe to be accurate, but we assume no responsibility for the accuracy
thereof.
Trustee
Wilmington Trust, National Association, will act
as Trustee under the Indenture. The Trustee has all of the duties and responsibilities specified under the Trust Indenture Act. The Trustee
is not obligated to exercise any of its rights or powers under the Indenture at the request or direction of the holders of the Notes,
unless the holders have offered and, if requested, provided to the Trustee security or indemnity satisfactory to the Trustee. The Trustee
may conclusively rely upon officers’ certificates, opinions or other documents furnished to it under the Indenture and will have
no responsibility to confirm or investigate the accuracy of mathematical calculations or other facts stated therein. The Trustee will
have no responsibility for monitoring our compliance with any of our covenants under the Indenture.
From time to time, we, and one or more of our subsidiaries,
may maintain deposit accounts and conduct other banking transactions, including lending transactions, with Wilmington Trust, National
Association in the ordinary course of business. Additionally, we maintain banking relationships with Wilmington Trust, National Association
and its affiliates in the ordinary course of business. These banking relationships include Wilmington Trust, National Association serving
as trustee under indentures involving certain of our outstanding subordinated notes.
Governing Law
The Notes and the Indenture pursuant to which such
notes will be issued are governed by, and will be construed in accordance with, the laws of the State of New York.
Notices
Where the Indenture provides for notice of any
event to a holder of a Note (whether by mail or otherwise), such notice will be sufficiently given if given to DTC pursuant to the applicable
procedures from DTC, including by electronic mail in accordance with accepted practices at DTC.
CERTAIN
ERISA CONSIDERATIONS
The following is a summary of certain considerations
associated with the purchase and holding of the Notes by (1) employee benefit plans subject to Title I of the U.S. Employee Retirement
Income Security Act of 1974, as amended, which we refer to as “ERISA”, (2) plans, individual retirement accounts and
other arrangements subject to Section 4975 of the Code, (3) plans subject to any federal, state, local, non-U.S. or other laws
or regulations that are similar to Title I of ERISA or Section 4975 of the Code, which we collectively refer to as “Similar
Laws”, and (4) entities whose underlying assets are considered to include “plan assets” of such employee benefit
plans, plans or arrangements (each of which we call a “Plan”).
Each fiduciary of a Plan should consider the fiduciary
standards of ERISA, to the extent applicable, or any applicable Similar Laws in the context of the Plan’s particular circumstances
before authorizing an investment in the Notes. Accordingly, among other factors, the fiduciary should consider whether the investment
would satisfy the prudence and diversification requirements of ERISA, to the extent applicable, or any applicable Similar Laws and would
be consistent with the documents and instruments governing the Plan.
In addition, Section 406 of ERISA and Section 4975
of the Code prohibit Plans subject to such provisions, which we call “ERISA Plans”, from engaging in certain transactions
involving “plan assets” with persons that are “parties in interest” under ERISA or “disqualified persons”
under Section 4975 of the Code with respect to the ERISA Plan. A violation of these “prohibited transaction” rules may
result in an excise tax for such persons or other liabilities under ERISA and/or Section 4975 of the Code, unless exemptive relief
is available under an applicable statutory or administrative exemption. Employee benefit plans that are governmental plans (as defined
in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and non-U.S. plans (as described in
Section 4(b)(4) of ERISA) are not subject to the requirements of ERISA or Section 4975 of the Code, but may be subject
to Similar Laws.
As a result of our business, we and certain of
our affiliates may be considered parties in interest or disqualified persons with respect to many ERISA Plans. Prohibited transactions
within the meaning of Section 406 of ERISA or Section 4975 of the Code could arise if the Notes were acquired by an ERISA Plan
with respect to which an underwriter or we or any of our affiliates is a party in interest or a disqualified person. For example, if any
underwriter or we or any of our affiliates are a party in interest or disqualified person with respect to an investing ERISA Plan (either
directly or, in our case, by reason of our ownership of our subsidiaries), the purchase of any Notes by an ERISA Plan, or by any person
investing the assets of any Plan, could result in a sale or exchange that is prohibited by Section 406(a)(1)(A) of ERISA and
Section 4975(c)(1)(A) of the Code or lending of money or other extension of credit that is prohibited by Section 406(a)(1)(B) of
ERISA and Section 4975(c)(1)(B) of the Code, unless exemptive relief were available under an applicable exemption (see below).
The U.S. Department of Labor has issued prohibited
transaction class exemptions, or PTCEs, that may provide exemptive relief for direct or indirect prohibited transactions resulting from
the purchase, holding or disposition of the Notes. Those class exemptions include:
| • | PTCE 96-23 — for certain transactions determined by in-house asset managers; |
| • | PTCE 95-60 — for certain transactions involving insurance company general accounts; |
| • | PTCE 91-38 — for certain transactions involving bank collective investment funds; |
| • | PTCE 90-1 — for certain transactions involving insurance company pooled accounts; and |
| • | PTCE 84-14 — for certain transactions determined by independent qualified professional asset managers. |
In addition, ERISA Section 408(b)(17) and
Section 4975(d)(20) of the Code provides an exemption for transactions between an ERISA Plan and a party in interest or disqualified
person, provided that the party in interest or disqualified person is not a fiduciary (or an affiliate) who has or exercises any discretionary
authority or control with respect to the investment of the ERISA Plan assets involved in the transaction or renders investment advice
with respect to those assets, and is a party in interest or disqualified person solely by reason of being a service provider to the ERISA
Plan or having a relationship to a service provider to the ERISA Plan and provided, further that the ERISA Plan pays no more, nor receives
no less, than adequate consideration in connection with the transaction (the so-called “service provider exemption”). No assurance
can be made that any such exemptions will be available, or that all of the conditions of any such exemptions will be satisfied, with respect
to transactions involving the Notes.
Because of the possibility that direct or indirect
prohibited transactions or violations of Similar Laws could occur as a result of the purchase, holding or disposition of the Notes by
a Plan or any person investing the assets of any Plan, the Notes may not be purchased by any Plan, or any person investing the assets
of any Plan, unless its purchase, holding and disposition of the Notes will not constitute or result in a non-exempt prohibited transaction
under ERISA or Section 4975 of the Code or a violation of any Similar Laws. Accordingly, any purchaser or holder of the Notes or
any interest in the Notes will be deemed to have represented by its purchase and holding of the Notes that either:
| • | it is not a Plan and is not purchasing the Notes or interest in the Notes on behalf of or with the assets of any Plan; or |
| • | its purchase, holding and disposition of the Notes or interest in the Notes will not constitute or result in a non-exempt prohibited
transaction under ERISA or the Code or a violation of any Similar Laws. |
Due to the complexity of these rules and the
penalties imposed upon persons involved in non-exempt prohibited transactions, it is important that any person considering the purchase
of the Notes on behalf of or with the assets of any Plan consult with its counsel regarding the consequences under ERISA, the Code and
any applicable Similar Laws of the acquisition, ownership and disposition of the Notes, whether any exemption would be applicable, and
whether all conditions of such exemption would be satisfied such that the acquisition and holding of the Notes by the Plan would be entitled
to full exemptive relief thereunder.
Nothing herein will be construed as, and the sale
of the Notes to a Plan is in no respect, a representation or advice by us or the underwriters (or any of our or their affiliates) as to
whether any investment in the Notes would meet any or all of the relevant legal requirements with respect to investment by, or is appropriate
for, Plans generally or any particular Plan. The foregoing discussion is merely a summary and should not be construed as legal advice
or as complete in all relevant respects.
MATERIAL
U.S. FEDERAL INCOME TAX CONSIDERATIONS
This section describes the material U.S. federal
income tax considerations of the acquisition, ownership and disposition of the Notes we are offering. It is not a complete analysis of
all the potential tax considerations relating to the Notes. This summary is based upon the provisions of the Code, Treasury Regulations
promulgated under the Code, and currently effective administrative rulings and judicial decisions. These authorities may be changed, perhaps
with retroactive effect, so as to result in U.S. federal income tax consequences different from those set forth below.
This summary is limited to beneficial owners (referred
to in this summary as holders) of the Notes that purchase the Notes upon their initial issuance at their “issue price” (i.e.,
the first price at which a substantial amount of the Notes is sold for cash to investors (excluding sales to bond houses, brokers or similar
persons or organizations acting in the capacity as underwriters, placement agents or wholesalers)) and that will hold the Notes as capital
assets within the meaning of Section 1221 of the Code for U.S. federal income tax purposes. This summary does not address the tax
considerations arising under the laws of any foreign, state or local jurisdiction. In addition, this discussion does not address any alternative
minimum or Medicare contribution tax considerations, nor does it address all U.S. federal income tax considerations that may be applicable
to holders’ particular circumstances or to holders that may be subject to special tax rules, such as, for example:
| • | banks, insurance companies, or other financial institutions; |
| • | real estate investment trusts; |
| • | regulated investment companies; |
| • | controlled foreign corporations and their shareholders; |
| • | passive foreign investment companies and their shareholders; |
| • | tax-exempt organizations; |
| • | qualified retirement plans, individual retirement accounts and other deferred compensation arrangements; |
| • | brokers and dealers in securities; |
| • | certain U.S. expatriates; |
| • | traders in securities that elect to use a mark-to-market method of accounting for their securities holdings; |
| • | U.S. holders (as defined below) whose functional currency is not the U.S. dollar; |
| • | holders subject to the special tax accounting rules under Section 451 of the Code; |
| • | persons that will hold the Notes as a position in a hedging transaction, wash sale, straddle, conversion transaction or other risk
reduction or synthetic transaction; and |
| • | entities or arrangements classified as partnerships or S corporations for U.S. federal income tax purposes or other pass-through entities,
or investors in such entities. |
If an entity or arrangement classified as a partnership
for U.S. federal income tax purposes holds the Notes, the tax treatment of a partner in the partnership will generally depend upon the
status of the partner and the activities of the partnership. If you are an entity or arrangement classified as a partnership for U.S.
federal income tax purposes that will hold Notes or a partner of such a partnership, you are urged to consult your tax advisor regarding
the tax consequences of holding the Notes to you.
This summary of certain U.S. federal income
tax considerations is for general information only and is not tax advice. You are urged to consult your tax advisor with respect to the
application of U.S. federal income tax laws to your particular situation as well as any tax considerations arising under other U.S. federal
tax laws (such as the estate or gift tax laws) or under the laws of any state, local, foreign or other taxing jurisdiction or under any
applicable tax treaty.
U.S. Holders
This subsection describes the tax considerations
for a “U.S. holder.” You are a “U.S. holder” if you are a beneficial owner of a Note and you are:
| • | an individual citizen or resident of the United States; |
| • | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the
laws of the United States, any state thereof, or the District of Columbia; |
| • | an estate the income of which is subject to U.S. federal income tax regardless of its source; or |
| • | a trust that (1) is subject to the supervision of a court within the United States if one or more “United States persons”
(as defined in the Code) have the authority to control all substantial decisions of the trust, or (2) has a valid election in effect
under applicable Treasury Regulations to be treated as a “United States person.” |
Payments
of interest and original discount on the Notes. The Notes will initially bear interest at a fixed annual rate.
Subsequent to the fixed rate period, the Notes will bear interest at the Benchmark Rate, which is expected to be the Three-Month Term
SOFR, plus a fixed spread. The Notes should be treated for U.S. federal income tax purposes as variable rate debt instruments that
provide for a single fixed rate followed by a single “qualified floating rate.” A qualified floating rate is any variable
rate where variations in the value of such rate can reasonably be expected to measure contemporaneous variations in the cost of newly
borrowed funds in the currency in which the debt instrument is denominated. Under this characterization, payments treated as qualified
stated interest on the Notes generally will be taxable to U.S. holders as ordinary interest income at the time such interest payments
are accrued or received, depending on the U.S. holder’s regular method of accounting for U.S. federal income tax purposes.
Qualified stated interest generally means stated interest that is unconditionally payable in cash at least annually at a single fixed
rate, but as discussed below, special rules are applicable to a variable rate debt instrument.
For U.S. federal income tax purposes, original
issue discount is the excess of the stated redemption price at maturity of a debt instrument over its issue price (as defined above) if
such excess equals or exceeds a specified de minimis amount (generally 1/4 of 1% of the debt instrument’s stated
redemption price at maturity multiplied by the number of complete years to maturity of such debt instrument). The stated redemption
price at maturity of a debt instrument is the sum of all payments provided by the debt instrument other than payments of qualified stated
interest. A U.S. holder (regardless of its method of tax accounting) will be required to include original issue discount in ordinary income
as it accrues in accordance with a constant yield method based on a compounding of interest. Any amounts included in income as original
issue discount with respect to a Note will increase a U.S. holder’s adjusted basis in the Note.
Under applicable Treasury Regulations, to determine
the amount of qualified stated interest and original issue discount in respect of variable rate debt instruments such as the Notes, an
equivalent fixed rate debt instrument must be constructed. The equivalent fixed rate debt instrument is a hypothetical instrument that
has terms that are identical to those of the Notes, except that the equivalent fixed rate debt instrument provides for fixed rate substitutes
in lieu of the actual rates on the Notes. The equivalent fixed rate debt instrument for the Notes is constructed in the following fashion:
(1) first, the initial fixed rate is replaced with a qualified floating rate such that the fair market value of the Notes as of the
Notes’ issue date would be approximately the same as the fair market value of an otherwise identical debt instrument that provides
for the replacement qualified floating rate rather than the fixed rate, and (2) second, each qualified floating rate (including the
qualified floating rate determined under (1) above) is converted into a fixed rate substitute (which, in each case, generally will
be the value of each qualified floating rate as of the issue date of the Notes).
After the equivalent fixed rate debt instrument
has been constructed pursuant to the foregoing rules, the amount of qualified stated interest and original issue discount, if any, are
determined for the equivalent fixed rate debt instrument by applying the general original issue discount rules to the equivalent
fixed rate debt instrument, and a U.S. holder of the Notes will account for such original issue discount, if any, and qualified stated
interest as if the U.S. holder held the equivalent fixed rate debt instrument. For each accrual period, appropriate adjustments will be
made to the amount of qualified state interest or original issue discount assumed to have been accrued or paid with respect to the equivalent
fixed rate debt instrument in the event that such amounts differ from the actual amount of interest accrued or paid on the Notes during
the accrual period.
The Treasury Regulations provide special rules for
determining the yield and maturity of a debt instrument, such as the Notes, that provide an issuer with an unconditional option to redeem
the instrument at specified times. The Treasury Regulations generally deem an issuer to exercise a redemption option in a manner that
minimizes the yield on the debt instrument for purposes of determining whether a debt instrument is issued with original issue discount.
If, as of the issue date, the initial fixed rate substitute on the equivalent fixed rate debt instrument (as determined in the manner
described above) is equal to or greater than the fixed rate substitute of the floating rate (as determined in the manner described above),
the Notes will be presumed not to be redeemed, and the qualified stated interest and original issue discount with respect to the Notes
will be calculated as described above. Under such circumstances, the Notes may be issued with original issue discount. If, however, as
of the issue date, the initial fixed rate substitute on the equivalent fixed rate debt instrument (as determined in the manner described
above) is less than the fixed rate substitute of the floating rate (as determined in the manner described above), the yield on the Notes
will be minimized if the Notes are redeemed immediately before the change in the interest rate at the end of the fixed rate period, and,
therefore, the Notes will be treated as maturing on such date and issued without original issue discount. This presumption is made solely
for purposes of determining whether the Notes are issued with original issue discount for U.S. federal income tax purposes and is not
an indication of our intention to redeem or not to redeem the Notes at any time. If, contrary to this presumption, the Notes are not redeemed
prior to the change in the interest rate at the end of the fixed rate period, then, solely for original issue discount purposes, the Notes
will be deemed to be reissued at their adjusted issue price on the date that they are not redeemed, and therefore as issued without original
issue discount. This deemed reissuance should not give rise to taxable gain or loss to U.S. holders.
Sale,
exchange, retirement or other taxable disposition. Upon the sale, exchange, retirement or other taxable disposition
of a Note, a U.S. holder will recognize taxable gain or loss equal to the difference between the amount realized on such disposition (except
to the extent any amount realized is attributable to accrued but unpaid interest, which will be treated as a payment of interest) and
the U.S. holder’s adjusted tax basis in the Note. U.S. holder’s adjusted tax basis in a Note generally will be its cost increased
by the amounts of any original issue discount previously included in income by the U.S. holder with respect to the Note and decreased
by any payments (other than amounts treated as qualified stated interest received) on the Note. Gain or loss recognized on the disposition
of a Note generally will be capital gain or loss, and will be long-term capital gain or loss if, at the time of the disposition, the U.S.
holder’s holding period for the Note is more than one year. Long-term capital gains of non-corporate taxpayers are generally eligible
for preferential rates of taxation. The deductibility of capital losses is subject to certain limitations.
Information
reporting and backup withholding. Information returns are required to be filed with the IRS in connection
with payments on the Notes and proceeds received from a sale or other disposition of the Notes unless the U.S. holder is an exempt recipient.
U.S. holder may also be subject to backup withholding on these payments in respect of the U.S. holder’s Notes unless the U.S. holder
provides a taxpayer identification number and otherwise complies with applicable requirements of the backup withholding rules or
the U.S. holder provides proof of an applicable exemption. Amounts withheld under the backup withholding rules are not additional
taxes and may be refunded or credited against the U.S. holder’s U.S. federal income tax liability, provided the required information
is timely furnished to the IRS.
Non-U.S. Holders
This subsection describes the tax considerations
for a “non-U.S. holder.” You are a “non-U.S. holder” if you are the beneficial owner of a Note that is not an
entity or arrangement classified as a partnership for U.S. federal income tax purposes (which, as indicated above, we do not address
herein) and is:
| • | a nonresident alien individual; |
| • | a foreign corporation; or |
| • | an estate or trust that in either case is not subject to United States federal income tax on a net income basis on income or gain
from the Notes. |
Payments
of interest. Subject to the discussion under “— Information reporting and backup withholding” and
“— FATCA” below, payments of principal and interest on the Notes to a non-U.S. holder generally will be exempt
from U.S. federal income or withholding tax if, in the case of the payments of interest:
| • | the non-U.S. holder does not own, actually or constructively, 10% or more of the combined voting power of all classes of our stock
entitled to vote; |
| • | the non-U.S. holder is not a “controlled foreign corporation” for U.S. federal income tax purposes that is related to
us through stock ownership; |
| • | the non-U.S. holder certifies under penalties of perjury on IRS Form W-8BEN or, if applicable, W-8BEN-E that the non-U.S. holder
is not a United States person (or, in the case of Notes held by a foreign intermediary (other than a “qualified intermediary”),
the foreign intermediary provides IRS Form W-8IMY with the required attachments, including an appropriate certification by each beneficial
owner of Notes); and |
| • | the non-U.S. holder is not receiving such interest as income effectively connected with the conduct by the non-U.S. holder of a trade
or business within the United States. |
If a non-U.S. holder cannot satisfy one of the
first three requirements described above and interest on the Notes is not exempt from withholding because it is effectively connected
with the non-U.S. holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty,
is attributable to the non-U.S. holder’s U.S. permanent establishment or fixed base), as described below, payments of interest on
the Notes will be subject to withholding tax at a rate of 30%, or the rate specified by an applicable treaty.
Sale,
exchange or other taxable disposition. Subject to the discussions of FATCA and information reporting and backup
withholding below, a non-U.S. holder generally will not be subject to U.S. federal income or withholding tax on gain realized on a sale,
redemption or other taxable disposition of Notes, unless the gain is effectively connected with the non-U.S. holder’s conduct of
a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to the non-U.S. holder’s
U.S. permanent establishment or fixed base), as described below. However, any proceeds attributable to accrued interest will be treated
as described in “— Payments of interest” above.
Income
or gain effectively connected with a U.S. trade or business. If interest or gain on the Notes is effectively
connected with a non-U.S. holder’s conduct of a trade or business in the United States (and, if required by an applicable income
tax treaty, is attributable to a U.S. permanent establishment or fixed base maintained by a non-U.S. holder), a non-U.S. holder will generally
be taxed in the same manner as a U.S. holder. In this case, a non-U.S. holder will be exempt from the withholding tax on interest
discussed above, although a non-U.S. holder will be required to provide a properly executed IRS Form W-8ECI in order to claim an
exemption from withholding. Non-U.S. holders should consult their tax advisors with respect to other U.S. tax consequences of the ownership
and disposition of Notes, including the possible imposition of a branch profits tax at a rate of 30% (or a lower treaty rate) if the non-U.S.
holder is a corporation.
Information
reporting and backup withholding. Information returns are required to be filed with the IRS in connection
with payments of interest on the Notes. Unless the non-U.S. holder complies with certification procedures to establish that the non-U.S.
holder is not a United States person, information returns may also be filed with the IRS in connection with the proceeds from a sale or
other disposition of a note. A non-U.S. holder may be subject to backup withholding on payments on the Notes or on the proceeds from a
sale or other disposition of the Notes unless the non-U.S. holder complies with certification procedures to establish that a non-U.S.
holder is not a United States person or otherwise establish an exemption. The certification procedures required to claim the exemption
from withholding tax on interest described above will satisfy the certification requirements necessary to avoid backup withholding as
well.
Amounts withheld under the backup withholding rules are
not additional taxes and may be refunded or credited against the non-U.S. holder’s U.S. federal income tax liability, provided the
required information is timely furnished to the IRS.
FATCA. Provisions
commonly referred to as “FATCA” impose withholding of 30% on payments of interest on the Notes and on payments of gross proceeds
of sales or redemptions of the Notes to “foreign financial institutions” (which is broadly defined for this purpose and in
general includes investment vehicles and financial intermediaries) and certain other non-U.S. entities unless various U.S. information
reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities)
have been satisfied, or an exemption applies. However, proposed Treasury Regulations (the preamble to which specifies that taxpayers are
permitted to rely on them pending finalization) eliminate the withholding requirement on payments of gross proceeds of a taxable disposition
(other than any amount treated as interest). Holders are encouraged to consult with their own tax advisors regarding the possible implications
of FATCA on their investment in the Notes.
The discussion of U.S. federal income tax considerations
set forth above is included for general information only and may not be applicable depending upon a holder’s particular situation.
Prospective purchasers of the Notes are urged to consult their own tax advisors with respect to the tax consequences to them of the purchase,
ownership and disposition of Notes, including the tax consequences under state, local, estate, foreign and other tax laws and the possible
effects of changes in U.S. or other tax laws.
UNDERWRITING
We and the underwriters named below, for whom Keefe,
Bruyette & Woods, Inc. and PNC Capital Markets LLC are acting as representatives, have entered into an underwriting agreement
dated as of the date of this prospectus supplement. Subject to certain conditions, the underwriters have severally agreed to purchase,
and we have agreed to sell to them, severally, the respective principal amount of the Notes set forth opposite their names below:
Underwriters | |
| Principal Amount | |
Keefe, Bruyette & Woods, Inc. | |
$ | | |
PNC Capital Markets LLC | |
$ | | |
Total | |
$ | | |
The underwriting agreement provides that the obligations
of the several underwriters to pay for and accept delivery of the Notes is subject to, among other things, the approval of certain legal
matters by their counsel and certain other conditions. The underwriters are obligated to take and pay for all of the Notes if any are
taken. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters
may be increased or the underwriting agreement may be terminated.
We expect that delivery of the Notes will be made
to investors on or about , 2022 which will be the business day following the date hereof (such settlement being referred to as “T+
”). Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business
days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes prior to the
delivery of the Notes will be required, by virtue of the fact that the Notes will initially settle in T+ , to specify an alternate settlement
arrangement at the time of any such trade to prevent a failed settlement. Purchasers of the Notes who wish to trade the Notes prior to
their date of delivery hereunder should consult their advisors.
The underwriters initially propose to offer the
Notes directly to the public at the public offering price that appears on the cover page of this prospectus supplement and to certain
dealers at that price less a selling concession not in excess of $ per Note. Any underwriter may allow, and such dealers may reallow,
a discount not in excess of $ per Note, to certain other brokers or dealers. After the initial offering of the Notes to the public, the
underwriters may vary the offering price and other selling terms of the Notes from time to time. The offering of the Notes by the underwriters
is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.
The following table shows the per Note and total
underwriting discounts we will pay the underwriters.
We estimate that our total expenses for this offering,
excluding underwriting discounts but including our reimbursement of the underwriters for their out-of-pocket expenses incurred in connection
with this offering, (including marketing, syndication and travel expenses, and excluding underwriting discounts and commissions), will
be approximately $ . In accordance with FINRA Rule 5110, the underwriters’ reimbursed expenses are deemed underwriting compensation
for this offering.
Clear-Market
We have agreed that, from the date of the underwriting
agreement and for a period of 30 days after the date of this prospectus supplement, we will not, without the prior written consent of
the underwriters, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant for the sale of, or lend or otherwise transfer or dispose of, the Notes
or any securities that are substantially similar to the Notes, or cause to be filed, any registration statement under the Securities Act
of 1933, as amended (the “Securities Act”), with respect to any of the foregoing, or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership
of the Notes or such other securities.
No Public Trading Market
There is currently no public trading market for
the Notes. In addition, we have not applied and do not intend to apply to list the Notes on any securities exchange or to have the Notes
quoted on a quotation system. The underwriters have advised us that they intend to make a market in the Notes. However, they are not obligated
to do so and may discontinue any market-making in the Notes at any time in their sole discretion. Therefore, we cannot assure you that
a liquid trading market for the Notes will develop, that you will be able to sell your Notes at a particular time, or that the price you
receive when you sell will be favorable. If an active trading market for the Notes does not develop, the market price and liquidity of
the Notes may be adversely affected. If the Notes are traded, they may trade at a discount from their initial offering price, depending
on prevailing interest rates, the market for similar securities, the credit ratings for the Notes, our operating performance and financial
condition, general economic conditions and other factors.
Price Stabilization, Short Positions
In connection with this offering of the Notes,
the underwriters may engage in overallotment and stabilizing transactions in accordance with Regulation M under the Exchange Act. Overallotment
involves sales in excess of the offering size, which create a short position for the underwriters. Stabilizing transactions involve bids
to purchase the Notes in the open market for the purpose of pegging, fixing, or maintaining the price of the Notes. Stabilizing transactions
may cause the price of the Notes to be higher than it would otherwise be in the absence of those transactions. If the underwriters engage
in stabilizing transactions, they may discontinue them at any time.
Neither we nor the underwriters make any representation
or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the Notes.
In addition, neither we nor the underwriters make any representation that the underwriters will engage in these transactions or that these
transactions, once commenced, will not be discontinued without notice.
Other Relationships
The underwriters and their respective affiliates
are full service financial institutions. Certain of the underwriters and their respective affiliates have, from time to time, performed,
and may in the future perform, various financial advisory and investment banking services for the Company, for which they have received
and may receive customary fees and expenses. In addition, in the ordinary course of their various business activities, the underwriters
and their respective affiliates have made or held, and may in the future make or hold, a broad array of investments, including serving
as counterparties to certain derivative and hedging arrangements, and may have actively traded, and, in the future may actively trade,
debt and equity securities (or related derivative securities), and financial instruments (including bank loans) for their own account
and for the accounts of their customers and may have in the past and at any time in the future hold long and short positions in such securities
and instruments. Such investment and securities activities may have involved, and in the future may involve, securities and instruments
of the Company. If any of the underwriters or their affiliates have a lending relationship with us, certain of those underwriters or their
affiliates routinely hedge, and certain other of those underwriters or their affiliates may hedge, their credit exposure to us consistent
with their customary risk management policies. Typically, these underwriters and their affiliates would hedge such exposure by entering
into transactions which consist of either the purchase of credit default swaps or the creation of short positions in our securities, including
potentially the Notes offered hereby. Any such credit default swaps or short positions could adversely affect future trading prices of
the Notes offered hereby. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent
research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or
short positions in such securities and instruments.
We have agreed to indemnify the underwriter against
certain liabilities, including liabilities under the Securities Act.
Electronic Distribution
This prospectus supplement and the accompanying
prospectus may be made available in electronic format on one or more websites or through other online services maintained by the underwriters
or by their affiliates. Other than the prospectus supplement and the accompanying prospectus in electronic format, information on such
websites and any information contained in any other website maintained by the underwriters or any of their affiliates is not part of this
prospectus supplement or our registration statement of which the related prospectus forms a part, has not been approved or endorsed by
us or the underwriters in their capacity as underwriters and should not be relied on by investors.
Other Matters
Other than in the United States, no action has
been taken by us or the underwriters that would permit a public offering of the Notes offered by this prospectus supplement in any jurisdiction
where action for that purpose is required. The Notes offered by this prospectus supplement may not be offered or sold, directly or indirectly,
nor may this prospectus supplement, the accompanying prospectus or any other offering material or advertisements in connection with the
offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in
compliance with the applicable rules and regulations of that jurisdiction. We and the underwriters require that the persons into
whose possession this prospectus supplement comes inform themselves about and to observe any restrictions relating to the offering and
the distribution of this prospectus supplement. This prospectus supplement does not constitute an offer to sell or a solicitation of an
offer to buy any securities offered by this prospectus supplement in any jurisdiction in which such an offer or a solicitation is unlawful.
LEGAL
MATTERS
The validity of the Notes offered hereby will be
passed upon for BHLB by Luse Gorman, PC, Washington, D.C. Certain legal matters related to the offering will be passed upon for the underwriters
by Hunton Andrews Kurth LLP, Dallas, Texas.
EXPERTS
The consolidated financial statements of the Company
and its subsidiaries as of December 31, 2021, 2020 and 2019 and for each of the years in the three-year period ended December 31,
2021, have been audited by Crowe LLP, an independent registered public accounting firm, as set forth in their report appearing in our Annual
Report on Form 10-K for the year ended December 31, 2021 and incorporated in this prospectus supplement by reference. Such
financial statements have been so incorporated in the reliance upon the report of such firm given upon their authority as experts in accounting
and auditing.
PROSPECTUS
![LOGO](https://content.edgar-online.com/edgar_conv_img/2022/06/28/0001104659-22-075042_tm2219164d1_424b5img01.jpg)
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
Warrants or Other Rights
Purchase Contracts
Units
Subscription Rights
Berkshire Hills Bancorp, Inc. and/or
one or more selling security holders to be identified in the future may offer to sell, from time to time, shares of our common
stock or preferred stock, either separately or represented by depositary shares, rights or warrants exercisable for our common
stock, preferred stock or depositary shares representing preferred stock, stock purchase contracts, debt securities and units or
subscription rights to purchase common stock, preferred stock, depositary shares or debt securities that we may offer to our stockholders
(together, the “Securities”). Such Securities may be offered separately or together, in separate series or classes
and in amounts, at prices and on terms described in one or more prospectus supplements. The preferred stock and warrants may be
convertible into or exercisable for common or preferred stock.
This prospectus provides you with a general
description of the Securities that may be offered. Each time Securities are sold, we will provide one or more supplements to this
prospectus that will contain additional information about the specific offering and the terms of the Securities being offered.
The supplements may also add to, update or change information contained in this prospectus. You should carefully read this prospectus
and any accompanying prospectus supplement before you invest in any of our Securities.
The Securities may be offered and sold in
any combination or amounts, at prices and on terms that we will determine at the time of any particular offering, to or through
one or more agents, dealers or underwriters, or directly to purchasers, including through subscription rights offerings, on a continuous
or delayed basis.
Our common stock is traded on the New York
Stock Exchange under the symbol “BHLB.”
You should read this prospectus and any
supplements carefully before you invest. Investing in our securities involves a high degree of risk. See the section entitled “Risk
Factors,” on page 4 of this prospectus, in any prospectus supplement and in the documents we file with the Securities
and Exchange Commission that are incorporated in this prospectus by reference for certain risks and uncertainties you should consider.
You should rely only on the information
contained or incorporated by reference in this prospectus or any supplement. We have not authorized anyone to provide you with
different information. You should not assume that the information in this prospectus or any supplement is accurate as of any date
other than the date on the front of such documents. We are not making an offer to sell these Securities in any jurisdiction where
the offer or sale is not permitted.
Neither the Securities and Exchange Commission,
nor any bank regulatory agency, nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense. The securities are not savings
or deposit accounts and are not insured by the FDIC or any other governmental agency.
The date of this prospectus is March 20, 2020
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement that we filed with the Securities and Exchange Commission (the “SEC”), using a “shelf” registration
process for the delayed offering and sale of securities pursuant to Rule 415 under the Securities Act of 1933, as amended
(the “Securities Act”). Under the shelf process, we may, from time to time, sell any of the Securities described in
this prospectus in one or more offerings. Additionally, under the shelf process, we may provide a prospectus supplement that will
contain specific information about the terms of a particular offering by us. We may also provide a prospectus supplement to add
information to, or update or change information contained in, this prospectus.
We have filed with the SEC a registration
statement on Form S-3, of which this prospectus is a part, under the Securities Act, with respect to the Securities. This
prospectus does not contain all of the information set forth in the registration statement, portions of which we have omitted as
permitted by the rules and regulations of the SEC. Statements contained in this prospectus as to the contents of any contract
or other document are not necessarily complete. You should refer to the copy of each contract or document filed as an exhibit to
the registration statement for a complete description.
Because we are a well-known seasoned issuer,
as defined in Rule 405 under the Securities Act, we may add to and offer additional securities including secondary securities
by filing a prospectus supplement or term sheet with the SEC at the time of the offer.
You should read this prospectus together
with any additional information you may need to make your investment decision. You should also read and carefully consider the
information in the documents we have referred you to in “Where You Can Find More Information” and “Incorporation
of Certain Documents by Reference” below. Information incorporated by reference after the date of this prospectus may add
to, update or change information contained in this prospectus. Any information in such subsequent filings that is inconsistent
with this prospectus will supersede the information in this prospectus or any earlier prospectus supplement.
Unless otherwise indicated or unless the
context requires otherwise, all references in this prospectus to “Berkshire Hills Bancorp,” the “Company,”
“we,” “us,” “our” or similar references mean Berkshire Hills Bancorp, Inc. and references
to the “Bank” mean Berkshire Bank.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration
statement under the Securities Act that registers, among other securities, the offer and sale of the securities that we may offer
under this prospectus. The registration statement, including the attached exhibits and schedules included or incorporated by reference
in the registration statement, contains additional relevant information about us. The rules and regulations of the SEC allow
us to omit certain information included in the registration statement from this prospectus. In addition, we file reports, proxy
statements and other information with the SEC under the Securities Exchange Act of 1934 (the “Exchange Act”). These
documents are available at the Internet site that the SEC maintains, http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
The SEC allows us to “incorporate
by reference” information we file with the SEC into this prospectus. This means that we can disclose important information
to you by referring you to another document that we file separately with the SEC. The information incorporated by reference is
considered to be a part of this prospectus, except for any information that is superseded by information that is included directly
in this document or in a more recent incorporated document.
This prospectus incorporates by reference
the documents listed below that we have previously filed with the SEC.
SEC Filings | |
Period or Filing Date (as applicable) |
Annual Report on Form 10-K | |
Year ended December 31, 2019 |
| |
|
Current
Reports on Form 8-K (other than information furnished under Items 2.02 or 7.01 of Form 8-K) | |
January 3, 2020, January 28, 2020, January 29, 2020, February 13, 2020 and February 24, 2020 |
| |
|
The description of Berkshire Hills Bancorp common stock and preferred stock set forth in the registration statement on Form 8-A (No. 1-15781) and any amendment or report filed with the SEC for the purpose of updating this description | |
November 13, 2012 |
In addition, we also incorporate by reference
all future documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of our initial registration statement relating to the securities until the completion of the distribution of the debt securities,
preferred stock, common stock, depositary shares, warrants, purchase contracts or units covered by this prospectus. These documents
include periodic reports, such as annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on
Form 8-K (other than current reports furnished under Items 2.02 or 7.01 of Form 8-K), as well as proxy statements.
The information incorporated by reference
contains information about us and our financial condition and is an important part of this prospectus.
You can obtain any of the documents incorporated
by reference in this document through us, or from the SEC through the SEC’s website at www.sec.gov. Documents incorporated
by reference are available from us without charge, excluding any exhibits to those documents, unless the exhibit is specifically
incorporated by reference as an exhibit in this prospectus. You can obtain documents incorporated by reference in this prospectus
by requesting them in writing or by telephone from us at the following address:
Berkshire Hills Bancorp, Inc.
60 State Street
Boston, Massachusetts 02109
Attention: Investor Relations Department
(800) 773-5601, ext. 133773
In addition, we maintain a corporate website,
ir.berkshirebank.com. We make available, through our website, our annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material
with, or furnish it to, the SEC. This reference to our website is for the convenience of investors as required by the SEC and shall
not be deemed to incorporate any information on the website into this Registration Statement.
We have not authorized anyone to give any
information or make any representation about us that is different from, or in addition to, those contained in this prospectus or
in any of the materials that we have incorporated into this prospectus. If anyone does give you information of this sort, you should
not rely on it. If you are in a jurisdiction where offers to sell, or solicitations of offers to purchase, the securities offered
by this document are unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer
presented in this document does not extend to you. The information contained in this document speaks only as of the date of this
document unless the information specifically indicates that another date applies.
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus and the other documents
we incorporate by reference in this prospectus, may include forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements, which are based
on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use
of the words “anticipate,” “believe,” “estimate,” “expect,” “intend,”
“plan,” “project,” “seek,” “strive,” “try,” or future or conditional
verbs such as “will,” “would,” “should,” “could,” “may,” or similar
expressions. The Company’s ability to predict results or the actual effects of its plans or strategies is inherently uncertain.
Although we believe that our plans, intentions and expectations, as reflected in these forward-looking statements are reasonable,
we can give no assurance that these plans, intentions or expectations will be achieved or realized. Our ability to predict results
or the actual effects of our plans and strategies is inherently uncertain. Actual results, performance or achievements could differ
materially from those contemplated, expressed or implied by the forward-looking statements contained in this prospectus. Important
factors that could cause actual results to differ materially from our forward-looking statements are set forth under Item 1A—“Risk
Factors” in our most recent annual report on Form 10-K and in other reports filed with the Securities and Exchange Commission.
There are a number of factors, many of which are beyond our control, that could cause actual conditions, events, or results to
differ significantly from those described in the forward-looking statements. These factors include, but are not limited to: general
economic conditions, either nationally or locally in some or all of the areas in which we conduct our business; conditions in the
securities markets or the banking industry; changes in interest rates, which may affect our net income or future cash flows; changes
in deposit flows, and in demand for deposit, loan, and investment products and other financial services in our local markets; changes
in real estate values, which could impact the quality of the assets securing our loans; changes in the quality or composition of
the loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions;
the ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into
our operations and our ability to realize related revenue synergies and cost savings within expected time frames; our timely development
of new and competitive products or services in a changing environment, and the acceptance of such products or services by our customers;
the outcome of pending or threatened litigation or of other matters before regulatory agencies, whether currently existing or commencing
in the future; changes in accounting principles, policies, practices, or guidelines; changes in legislation and regulation; operational
issues and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems,
on which we are highly dependent; changes in the monetary and fiscal policies of the U.S. Government, including policies of the
U.S. Treasury and the Board of Governors of the Federal Reserve System (the “Federal Reserve”); war or terrorist activities;
and other economic, competitive, governmental, regulatory, and geopolitical factors affecting the Company’s operations, pricing,
and services. Additionally, the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control.
You should not place undue reliance on these
forward-looking statements, which reflect our expectations only as of the date of this prospectus. We do not assume any obligation
to revise forward-looking statements except as may be required by law.
PROSPECTUS SUMMARY
This summary highlights selected information
about Berkshire Hills Bancorp, Inc. and a general description of the Securities we may offer. This summary is not complete
and does not contain all of the information that may be important to you. For a more complete understanding of Berkshire Hills
Bancorp, Inc. and the terms of the Securities we will offer, you should read carefully this entire prospectus, including the
applicable prospectus supplement for the Securities and the other documents we refer to and incorporate by reference. In particular,
we incorporate important business and financial information into this prospectus by reference.
RISK FACTORS
Before making an investment decision, you
should carefully consider the risks described under “Risk Factors” in the applicable prospectus supplement and
in our most recent Annual Report on Form 10-K, and in our updates to those Risk Factors in our Quarterly Reports on Form 10-Q,
together with all of the other information appearing in this prospectus or incorporated by reference into this prospectus, the
prospectus supplement or any applicable pricing supplement, in light of your particular investment objectives and financial circumstances.
In addition to those risk factors, there may be additional risks and uncertainties of which management is not aware. Our business,
financial condition or results of operations could be materially affected by any of these risks. The trading price of our securities
could decline due to any of these risks, and you may lose all or part of your investment.
BERKSHIRE HILLS BANCORP, INC.
Berkshire Hills Bancorp (the
“Company” or “Berkshire”) is headquartered in Boston, Massachusetts. It had approximately
$13.2 billion in assets as of December 31, 2019 and is the parent of Berkshire Bank — America’s Most
Exciting BankSM (the “Bank”). Berkshire Bank, a Massachusetts-chartered trust company, was
established in 1846.
In addition to Berkshire Bank, Berkshire
Hills Bancorp owns an insurance agency named Berkshire Insurance Group. Berkshire Hills Bancorp is regulated as a financial holding
company under the supervision of the Federal Reserve. Berkshire Bank is regulated under the supervision of the FDIC and the Commonwealth
of Massachusetts.
Our common stock currently
trades on the New York Stock Exchange under the symbol “BHLB.”
Our principal executive offices are located
at 60 State Street, Boston, Massachusetts 02109, and our telephone number is (800) 773-5601, ext. 133773.
Additional information about us and our
subsidiaries is included in documents incorporated by reference in this prospectus. See “Where You Can Find More Information”
on page 1 of this prospectus.
USE OF PROCEEDS
We intend to use the net proceeds from the
sale of the securities for general corporate purposes unless otherwise indicated in the prospectus supplement relating to a specific
issue of securities. Our general corporate purposes may include repurchasing our outstanding common stock, financing possible acquisitions
of branches, other financial institutions, other businesses that are related to banking or diversification into other banking-relating
businesses, extending credit to, or funding investments in, our subsidiaries and repaying, reducing or refinancing indebtedness.
The precise amounts and the timing of our
use of the net proceeds will depend upon market conditions, our subsidiaries’ funding requirements, the availability of other
funds and other factors. Until we use the net proceeds from the sale of any of our securities for general corporate purposes, we
will use the net proceeds to reduce our indebtedness or for temporary investments. We expect that we will, on a recurrent basis,
engage in additional financings as the need arises to finance our corporate strategies, to fund our subsidiaries, to finance acquisitions
or otherwise.
The prospectus supplement with respect to
an offering of any Security may identify different or additional uses for the proceeds of that offering.
The
Securities We May Offer
The descriptions of the Securities contained
in this prospectus, together with the applicable prospectus supplements, summarize certain material terms and provisions of the
various types of Securities that we or selling security holders may offer. The particular material terms of the Securities offered
by a prospectus supplement will be described in that prospectus supplement. If indicated in the applicable prospectus supplement,
the terms of the offered Securities may differ from the terms summarized below. The prospectus supplement will also contain information,
where applicable, about material U.S. federal income tax considerations relating to the offered Securities, and the securities
exchange, if any, on which the offered Securities will be listed. The descriptions in this prospectus and the applicable prospectus
supplement do not contain all of the information that you may find useful or that may be important to you. You should refer to
the provisions of the actual documents whose terms are summarized herein and in the applicable prospectus supplement, because those
documents, and not the summaries, define your rights as holders of the relevant Securities. For more information, please review
the forms of these documents, which will be filed with the SEC and will be available as described under the heading “Where
You Can Find More Information” above.
DESCRIPTION OF DEBT SECURITIES
General
We may issue senior debt securities or subordinated
debt securities. Senior debt securities will be issued under an indenture, referred to as the “senior indenture,” and
subordinated debt securities will be issued under a separate indenture, referred to in this section as the “subordinated
indenture.” The senior indenture and the subordinated indenture are referred to in this section as the “indentures.”
The senior debt securities and the subordinated debt securities are referred to in this section as the “debt securities.”
The debt securities will be our direct unsecured general obligations.
This prospectus describes the general terms
and provisions of the debt securities. When we offer to sell a particular series of debt securities, we will describe the specific
terms of the securities in a supplement to this prospectus. The prospectus supplement will also indicate whether the general terms
and provisions described in this prospectus apply to a particular series of debt securities.
The following briefly describes the general
terms and provisions of the debt securities and the indentures. We have not restated these indentures in their entirety in this
description. We have filed the forms of the indentures, including the forms of debt securities, as exhibits to the registration
statement of which this prospectus is a part. We urge you to read the indentures, because they, and not this description, control
your rights as holders of the debt securities. The following description of the indentures is not complete and is subject to, and
qualified in its entirety by reference to, all the provisions in the respective indentures. Capitalized terms used in the summary
have the meanings specified in the indentures.
Neither indenture limits the amount of debt
securities that we may issue under the indenture from time to time in one or more series. We may in the future issue debt securities
under either indenture. At the date of this prospectus, we had not issued any debt securities under either indenture.
Neither indenture contains provisions that
would afford holders of debt securities protection in the event of a sudden and significant decline in our credit quality or a
takeover, recapitalization or highly leveraged or similar transaction. Accordingly, we could in the future enter into transactions
that could increase the amount of indebtedness outstanding at that time or otherwise adversely affect our capital structure or
credit rating.
The debt securities will be our exclusive
obligations. Neither indenture requires our subsidiaries to guarantee the debt securities. As a result, the holders of debt securities
will generally have a junior position to claims of all creditors and preferred shareholders of our subsidiaries.
Terms of Each Series of Debt Securities Provided in
the Prospectus Supplement
A prospectus supplement and any supplemental
indenture relating to any series of debt securities being offered will include specific terms relating to the offering. These terms
will include some or all of the following:
| • | the form and title of the debt securities; |
| • | whether the debt securities are senior debt securities or subordinated debt securities and the terms of subordination; |
| • | the principal amount of the debt securities; |
| • | the denominations in which the debt securities will be issued; |
| • | the portion of the principal amount which will be payable if the maturity of the debt securities is accelerated; |
| • | the currency or currency unit in which the debt securities will be paid, if not U.S. dollars; |
| • | any right we may have to defer payments of interest by extending the dates payments are due and whether interest on those deferred
amounts will be payable as well; |
| • | the place where the principal of, and premium, if any, and interest on any debt securities will be payable; |
| • | the date or dates on which the debt securities will be issued and the principal, and premium, if any, of the debt securities
will be payable; |
| • | the rate or rates which the debt securities will bear interest and the interest payment dates for the debt securities; |
| • | any mandatory or optional redemption provisions; |
| • | the terms, if any, upon which the debt securities are convertible into other securities of ours and the terms and conditions
upon which any conversion will be effected, including the initial conversion price or rate, the conversion period and any other
provisions in addition to or instead of those described in this prospectus; |
| • | any sinking fund or other provisions that would obligate us to repurchase or otherwise redeem the debt securities; |
| • | any deletion from, changes of or additions to the covenants or the Events of Default (as defined below) under “Provisions
in Both Indentures – Events of Default and Remedies”; |
| • | any changes to the terms and condition upon which the debt securities can be defeased or discharged; |
| • | any restriction or other provision with respect to the transfer or exchange of the debt securities; |
| • | the identity of any other trustee, paying agent and security registrar, if other than the trustee; and |
| • | any other terms of the debt securities. |
We will maintain in each place specified
by us for payment of any series of debt securities an office or agency where debt securities of that series may be presented or
surrendered for payment, where debt securities of that series may be surrendered for registration of transfer or exchange and where
notices and demands to or upon us in respect of the debt securities of that series and the related indenture may be served.
Debt securities may be issued under an indenture
as original issue discount securities to be offered and sold at a substantial discount below their principal amount. Material federal
income tax, accounting and other considerations applicable to any such original issue discount securities will be described in
any related prospectus supplement. “Original issue discount security” means any security which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof as a result
of the occurrence of an Event of Default and the continuation thereof.
Provisions Only in the Senior Indenture
Payment of the principal, premium, if any,
and interest on the senior debt securities will rank equally in right of payment with all of our other unsecured senior debt.
Provisions Only in the Subordinated Indenture
Payment of the principal, premium, if any,
and interest on the subordinated debt securities will be subordinate and junior in priority of payment to prior payment in full
of all of our senior indebtedness, including senior debt securities and other debt to the extent described in a prospectus supplement.
Subordinated Debt Securities Intended to Qualify as Tier
2 Capital
Unless otherwise stated in the applicable
prospectus supplement, it is currently intended that the subordinated debt securities will qualify as Tier 2 Capital under the
regulations issued by the Federal Reserve Board for bank holding companies. The regulations set forth specific criteria for subordinated
debt to qualify as Tier 2 Capital. Among other things, the subordinated debt must:
| • | have a minimum original maturity of at least five years; |
| • | be subordinated in right of payment; |
| • | not contain provisions permitting the holders of the debt to accelerate payment of principal prior to maturity except in the
event of bankruptcy of the issuer or of a major subsidiary depository institution of the issuing holding company; |
| • | not contain provisions permitting the issuer of the debt to redeem the security prior to the maturity date without prior approval
of the Federal Reserve; and |
| • | not contain provisions that would adversely affect liquidity or unduly restrict management’s flexibility to operate the
organization, particularly in times of financial difficulty, such as limitations on additional secured or senior borrowings, sales
or dispositions of assets or changes in control. |
Provisions in Both Indentures
Consolidation, Merger or Asset Sale
Each indenture generally allows us to consolidate
or merge with a domestic person, association or entity. Each also allows us to sell, lease or transfer our property and assets
substantially as an entirety to a domestic person, association or entity. If this happens, the remaining or acquiring person, association
or entity must assume all of our responsibilities and liabilities under the indentures including the payment of all amounts due
on the debt securities and performance of the covenants in the indentures.
However, we will only consolidate or merge
with or into any other person, association or entity or sell, lease or transfer our assets substantially as an entirety according
to the terms and conditions of the indentures, which require that:
| • | the remaining or acquiring person, association or entity is organized under the laws of the United States, any state within
the United States or the District of Columbia; |
| • | the remaining or acquiring person, association or entity assumes our obligations under the indentures; and |
| • | immediately after giving effect to the transaction, no Default or Event of Default, as defined below, shall have occurred and
be continuing. |
The remaining or acquiring person, association
or entity will be substituted for us in the indentures with the same effect as if it had been an original party to the indentures.
Thereafter, the successor may exercise our rights and powers under the indentures, in our name or in its own name. If we sell or
transfer all or substantially all of our assets, we will be released from all our liabilities and obligations under any indenture
and under the debt securities. If we lease all or substantially all of our assets, we will not be released from our obligations
under the indentures.
Events of Default and Remedies
In the indentures, Default with respect
to any series of debt securities means any event which is, or after notice or lapse of time or both would become, an Event of Default.
In the indentures, Event of Default with
respect to any series of debt securities means any of the following:
| • | failure to pay the principal of or any premium on any debt security of that series when due; |
| • | failure to pay interest on any debt security of that series for 30 days; |
| • | subject to certain exceptions, failure to perform any other covenant in the indenture, other than a covenant default in the
performance of which has expressly been included in the indenture solely for the benefit of series of debt securities other than
that series, that continues for 90 days after being given written notice as specified in the indenture; |
| • | our bankruptcy, insolvency or reorganization; or |
| • | any other Event of Default included in any indenture or supplemental indenture. |
If an Event of Default with respect to a
series of debt securities occurs and is continuing, the trustee or the holders of at least 25% in principal amount of all of the
outstanding debt securities of a particular series may declare the principal of all the debt securities of that series to be due
and payable. When such declaration is made, such amounts will be immediately due and payable. The holders of a majority in principal
amount of the outstanding debt securities of such series may rescind such declaration and its consequences if all existing Events
of Default have been cured or waived, other than nonpayment of principal or interest that has become due solely as a result of
acceleration.
Holders of a series of debt securities may
not enforce the indenture or the series of debt securities, except as provided in the indenture or a series of debt securities.
The trustee may require indemnity satisfactory to it before it enforces the indenture or such series of debt securities. Subject
to certain limitations, the holders of a majority in principal amount of the outstanding debt securities of a particular series
may direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust
or power of the trustee. The trustee may withhold notice to the holders of debt securities of any default, except in the payment
of principal or interest, if it considers such withholding of notice to be in the best interests of the holders.
An Event of Default for a particular series
of debt securities does not necessarily constitute an Event of Default for any other series of debt securities issued under an
indenture. Further, an Event of Default under the debt securities of any series will not necessarily constitute an event of default
under our other indebtedness or vice versa.
Modification of Indentures
Under each indenture, generally we and the
trustee may modify our rights and obligations and the rights of the holders with the consent of the holders of a majority in aggregate
principal amount of the outstanding debt securities of any series affected by the modification, voting as one class. No modification
of the principal or interest payment terms, requirement that the Company maintain an office or agency for matters related to the
debt securities, reduction of the percentage consent required for modifications, or impairment of the right to institute suit for
the payment on debt securities of any series when due, is effective against any holder without consent of all holders.
In addition, we and the trustee may enter
into supplemental indentures without the consent of any holder of the debt securities to make certain technical changes, such as:
| • | curing ambiguities or correcting defects or inconsistencies; |
| • | evidencing the succession of another person to us, and the assumption by that successor of our obligations under the applicable
indenture and the debt securities of any series; |
| • | providing for a successor trustee; |
| • | qualifying the indentures under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”); or |
| • | complying with the rules and regulations of any securities exchange or automated quotation system on which debt securities
of any series may be listed or traded. |
Discharging Our Obligations
We may choose either to discharge our obligations
on the debt securities of any series in a legal defeasance, or to release ourselves from our covenant restrictions on the debt
securities of any series in a covenant defeasance. We may do so at any time on the 91st day after we deposit with the trustee sufficient
cash or government securities to pay the principal, interest, any premium and any other sums due to the stated maturity date or
a redemption date of the debt securities of the series. If we choose the legal defeasance option, the holders of the debt securities
of the series will not be entitled to the benefits of the indenture except for registration of transfer and exchange of debt securities,
replacement of lost, stolen or mutilated debt securities, conversion or exchange of debt securities, sinking fund payments and
receipt of principal and interest on the original stated due dates or specified redemption dates.
We may discharge our obligations on the
debt securities of any series or release ourselves from covenant restrictions only if we meet certain requirements. Among other
things, we must deliver an opinion of our legal counsel that the discharge will not result in holders having to recognize taxable
income or loss or subject them to different tax treatment. In the case of legal defeasance, this opinion must be based on either
an IRS letter ruling or change in federal tax law. We may not have a default on the debt securities discharged on the date of deposit.
The discharge may not violate any of our agreements. The discharge may not result in our becoming an investment company in violation
of the Investment Company Act of 1940.
Information Concerning the Indenture Trustee
Under provisions of the indentures and the
Trust Indenture Act, if a trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the
trustee shall either eliminate such interest or resign in the manner provided by the indentures. Any resignation will require the
appointment of a successor trustee under the applicable indenture in accordance with its terms and conditions.
The trustee may resign with respect to one
or more series of debt securities and a successor trustee may be appointed by us to act with respect to any such series. The trustee
may be removed with respect to a series of debt securities by the Company in accordance with the terms of the Indenture, or by
the holders of a majority in aggregate principal amount of such series at any time.
Each indenture contains certain limitations
on the right of the trustee thereunder, in the event that it becomes our creditor, to obtain payment of claims in some cases, or
to realize on property received in respect of any such claim, as security or otherwise.
The trustee is required to submit an annual
report to the holders of the debt securities regarding, among other things, the trustee’s eligibility to serve, the priority
of the trustee’s claims regarding certain advances made by it, and any action taken by the trustee materially affecting the
debt securities. However, no annual report is required to be submitted if no event described in Section 313(a) of the
Trust Indenture Act has occurred within the 12 months preceding the reporting date.
Each indenture provides that, in addition
to other certificates or opinions that may be specifically required by other provisions of an indenture, every application by us
for action by the trustee shall be accompanied by a certificate of our officers and an opinion of counsel, who may be our counsel,
stating that, in the opinion of the signers, we have complied with all conditions precedent to the action.
No Personal Liability of Officers, Directors, Employees
or Shareholders
Our officers, directors, employees and shareholders
will not have any liability for our obligations under the indentures or the debt securities by way of his or her status. Each holder
of debt securities, by accepting a debt security, waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the debt securities.
Form, Denominations and Registration; Global Securities;
Book Entry Only System
Unless otherwise indicated in a prospectus
supplement, the debt securities of a series will be issued only in fully registered form, without coupons, in minimum denominations
of $1,000 or integral multiples in excess thereof. You will not have to pay a service charge to transfer or exchange debt securities
of a series, but we may require you to pay for taxes or other governmental charges due upon a transfer or exchange.
Unless otherwise indicated in a prospectus
supplement, each series of debt securities will be deposited with, or on behalf of, The Depository Trust Company (“DTC”)
or any successor depositary, which we call a “depositary,” and will be represented by one or more global notes registered
in the name of Cede & Co., as nominee of DTC. The interests of beneficial owners in the global notes will be represented
through financial institutions acting on their behalf as direct or indirect participants in DTC. See “Global Securities”
for the procedures for transfer of interests in securities held in global form.
DESCRIPTION OF COMMON STOCK
The following summary contains a description
of the general terms of the common stock that we may issue. The specific terms of any common stock will be described in the prospectus
supplement. Certain provisions of the common stock described below and in any prospectus supplement are not complete. You should
refer to our Certificate of Incorporation and filings with the SEC with respect to the offering of such common stock.
General
Berkshire Hills Bancorp, which is
incorporated under the General Corporation Law of the State of Delaware, is authorized to issue 100,000,000 shares of its
common stock, $0.01 par value, of which 50,201,987 shares were issued and outstanding as of March 20, 2020. Berkshire
Hills Bancorp’s board of directors may at any time, without additional approval of the holders of preferred stock or
common stock, issue additional authorized shares of common stock. In a prospectus supplement, we will describe the aggregate
number of shares offered and the offering price or prices of the shares.
Voting Rights
The holders of common stock are entitled
to one vote per share on all matters presented to stockholders. Holders of common stock are not entitled to cumulate their votes
in the election of directors. However, Berkshire Hills Bancorp’s Certificate of Incorporation provides that a record owner
of Berkshire Hills Bancorp’s common stock who beneficially owns, either directly or indirectly, in excess of 10% of Berkshire
Hills Bancorp’s outstanding shares, is not entitled to any vote in respect of the shares held in excess of the 10% limit.
No Preemptive or Conversion Rights
The holders of common stock do not have
preemptive rights to subscribe for a proportionate share of any additional securities issued by Berkshire Hills Bancorp before
such securities are offered to others. The absence of preemptive rights increases Berkshire Hills Bancorp’s flexibility to
issue additional shares of common stock in connection with Berkshire Hills Bancorp’s acquisitions, employee benefit plans
and for other purposes, without affording the holders of common stock a right to subscribe for their proportionate share of those
additional securities. The holders of common stock are not entitled to any redemption privileges, sinking fund privileges or conversion
rights.
Dividends
Holders of common stock are entitled to
receive dividends ratably when, as and if declared by Berkshire Hills Bancorp’s board of directors from assets legally available
therefor, after payment of all dividends on preferred stock, if any is outstanding. Under Delaware law, Berkshire Hills Bancorp
may pay dividends out of surplus or net profits for the fiscal year in which declared and/or for the preceding fiscal year, even
if our surplus accounts are in a deficit position. Dividends paid by our subsidiary bank have historically been a significant source
of funds available to Berkshire Hills Bancorp. Berkshire Hills Bancorp expects to use these sources of funds in the future, as
well as proceeds it may obtain from the offering of common stock, preferred stock and/or debt securities for payment of dividends
to our stockholders, the repurchase of our common stock and for other needs. Berkshire Hills Bancorp’s board of directors
intends to maintain its present policy of paying regular quarterly cash dividends. The declaration and amount of future dividends
will depend on circumstances existing at the time, including Berkshire Hills Bancorp’s earnings, financial condition and
capital requirements, as well as regulatory limitations and such other factors as Berkshire Hills Bancorp’s board of directors
deems relevant.
Berkshire Hills Bancorp’s principal
assets and sources of income consist of investments in our operating subsidiaries, which are separate and distinct legal entities.
Certain Certificate of Incorporation and Bylaw Provisions
Affecting Stock
Berkshire Hills Bancorp’s Certificate
of Incorporation and Bylaws contain several provisions that may make Berkshire Hills Bancorp a less attractive target for an acquisition
of control by anyone who does not have the support of Berkshire Hills Bancorp’s board of directors. Such provisions include,
among other things, the requirement of a supermajority vote of stockholders or directors to approve certain business combinations
and other corporate actions, a minimum price provision, several special procedural rules, a vote limitation provision and the limitation
that stockholder actions may only be taken at a meeting and may not be taken by unanimous written stockholder consent. The foregoing
is qualified in its entirely by reference to Berkshire Hills Bancorp’s Certificate of Incorporation and Bylaws, both of which
are on file with the SEC.
Restrictions on Ownership
Under the federal Change in Bank Control
Act, a notice must be submitted to the Federal Reserve if any person (including a company), or group acting in concert, seeks to
acquire “control” of a bank holding company or bank. An acquisition of “control” can occur upon the acquisition
of 10.0% or more of a class of voting securities of a bank holding company or savings institution or as otherwise defined by the
Federal Reserve. Under the Change in Bank Control Act, the Federal Reserve has 60 days from the filing of a complete notice to
act, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the anti-trust
effects of the acquisition.
DESCRIPTION OF PREFERRED STOCK
The following summary contains a description
of the general terms of the preferred stock that we may issue. The specific terms of any series of preferred stock will be described
in the prospectus supplement relating to that series of preferred stock. The terms of any series of preferred stock may differ
from the terms described below. Certain provisions of the preferred stock described below and in any prospectus supplement are
not complete. You should refer to the amendment to our Certificate of Incorporation or the Certificate of Designation with respect
to the establishment of a series of preferred stock which will be filed with the SEC in connection with the offering of such series
of preferred stock.
General
Berkshire Hills Bancorp is authorized to
issue up to 2,000,000 shares of preferred stock, par value $0.01, in one or more series, without stockholder action. As of March 20,
2020, 260,907 shares of Series B non-voting convertible preferred stock are outstanding. The Certificate of Incorporation
provides that the board of directors can fix the designation, powers, preferences and rights of each series. Berkshire Hills Bancorp’s
board of directors may, at any time without additional approval of the holders of preferred or common stock, authorize the issuance
of preferred stock with voting, dividend, liquidation and conversion and other rights that could dilute the voting power of the
common stock and may assist management in impeding any unfriendly takeover or attempted change in control. In a prospectus supplement,
we will describe the aggregate number of shares offered relating to a particular series of the preferred stock and the specific
terms of the offering.
Rank
Any series of the preferred stock will,
with respect to the priority of the payment of dividends and the priority of payments upon liquidation, winding up and dissolution,
rank:
|
• |
|
senior to all classes of common stock and all equity securities issued by us the terms of which specifically provide that the equity securities will rank junior to the preferred stock (the junior securities); |
|
• |
|
equally with all equity securities issued by us the terms of which specifically provide that the equity securities will rank equally with the preferred stock (the parity securities); and |
|
• |
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junior to all equity securities issued by us the terms of which specifically provide that the equity securities will rank senior to the preferred stock. |
Voting Rights
Unless otherwise described in the applicable
prospectus supplement, holders of the preferred stock will have no voting rights except as otherwise required by law or in our
certificate of incorporation.
Dividends
Holders of the preferred stock of each series
will be entitled to receive, when, as and if declared by our board of directors, cash dividends at such rates and on such dates
described, if any, in the prospectus supplement. Different series of preferred stock may be entitled to dividends at different
rates or based on different methods of calculation. The dividend rate may be fixed or variable or both. Dividends will be payable
to the holders of record as they appear on our stock books on record dates fixed by our board of directors, as specified in the
applicable prospectus supplement.
Dividends on any series of the preferred
stock may be cumulative or noncumulative, as described in the applicable prospectus supplement. If our board of directors does
not declare a dividend payable on a dividend payment date on any series of noncumulative preferred stock, then the holders of that
noncumulative preferred stock will have no right to receive a dividend for that dividend payment date, and we will have no obligation
to pay the dividend accrued for that period, whether or not dividends on that series are declared payable on any future dividend
payment dates. Dividends on any series of cumulative preferred stock will accrue from the date we initially issue shares of such
series or such other date specified in the applicable prospectus supplement.
No full dividends may be declared or paid
or funds set apart for the payment of any dividends on any parity securities unless dividends have been paid or set apart for payment
on the preferred stock. If full dividends are not paid, the preferred stock will share dividends pro rata with the parity securities.
No dividends may be declared or paid or funds set apart for the payment of dividends on any junior securities unless full cumulative
dividends for all dividend periods terminating on or prior to the date of the declaration or payment will have been paid or declared
and a sum sufficient for the payment set apart for payment on the preferred stock.
Our ability to pay dividends on our preferred
stock will depend on circumstances existing at the time, including Berkshire Hills Bancorp’s earnings, financial condition
and capital requirements, as well as regulatory limitations and such other factors as Berkshire Hills Bancorp’s board of
directors deems relevant.
Redemption
We may provide that a series of the preferred
stock may be redeemable, in whole or in part, at our option with prior approval of the Federal Reserve. In addition, a series of
preferred stock may be subject to mandatory redemption pursuant to a sinking fund or otherwise. The redemption provisions that
may apply to a series of preferred stock, including the redemption dates and the redemption prices for that series, will be described
in the prospectus supplement.
In the event of partial redemptions of preferred
stock, whether by mandatory or optional redemption, our board of directors will determine the method for selecting the shares to
be redeemed, which may be by lot or pro rata or by any other method determined to be equitable.
On or after a redemption date, unless we
default in the payment of the redemption price, dividends will cease to accrue on shares of preferred stock called for redemption.
In addition, all rights of holders of the shares will terminate except for the right to receive the redemption price.
Unless otherwise specified in the applicable
prospectus supplement for any series of preferred stock, if any dividends on any other series of preferred stock ranking equally
as to payment of dividends and liquidation rights with such series of preferred stock are in arrears, no shares of any such series
of preferred stock may be redeemed, whether by mandatory or optional redemption, unless all shares of preferred stock are redeemed,
and we will not purchase any shares of such series of preferred stock. This requirement, however, will not prevent us from acquiring
such shares pursuant to a purchase or exchange offer made on the same terms to holders of all such shares outstanding.
Restrictions on Ownership
Under regulations adopted by the Federal
Reserve, if the holders of any series of the preferred stock are or become entitled to vote for the election of directors, such
series may then be deemed a “class of voting securities.” Under the federal Change in Bank Control Act, a notice must
be submitted to the Federal Reserve if any person (including a company), or group acting in concert, seeks to acquire “control”
of a bank holding company or bank. An acquisition of “control” can occur upon the acquisition of 10.0% or more of a
class of voting securities of a bank holding company or savings institution or as otherwise defined by the Federal Reserve. Under
the Change in Bank Control Act, the Federal Reserve has 60 days from the filing of a complete notice to act, taking into consideration
certain factors, including the financial and managerial resources of the acquirer and the anti-trust effects of the acquisition.
Exchangeability
We may provide that the holders of shares
of preferred stock of any series may be required at any time or at maturity to exchange those shares for our debt securities. The
applicable prospectus supplement will specify the terms of any such exchange.
DESCRIPTION OF DEPOSITARY SHARES
This section describes the general terms
and provisions of the depositary shares offered by this prospectus. The applicable prospectus supplement will describe the specific
terms of any issuance of depositary shares. You should read the particular terms of any depositary shares we offer in any prospectus
supplement, together with the more detailed form of deposit agreement, including the form of depositary receipt relating to the
depositary shares, which will be filed as an exhibit to a document incorporated by reference in the registration statement of which
this prospectus forms a part. The prospectus supplement also will state whether any of the terms summarized below do not apply
to the depositary shares being offered.
General
We may offer fractional, rather than full
shares of preferred stock. If we exercise this option, we will provide for the issuance by a depositary to the public of depositary
receipts evidencing depositary shares, each of which will represent a fractional interest (to be stated in the applicable prospectus
supplement relating to a particular series of the preferred stock) in a share of a particular series of the preferred stock.
We will deposit the shares of any series
of the preferred stock underlying the depositary shares under a separate deposit agreement between us and a bank or trust company
selected by us, known as a depositary, having its principal office in the United States, and having a combined capital and surplus
of at least $50 million. The applicable prospectus supplement will provide the name and address of the depositary. Subject to the
terms of the deposit agreement, each owner of a depositary share will have a fractional interest in all the rights and preferences
of the preferred stock underlying the depositary share. These rights include any dividend, voting, redemption, conversion and liquidation
rights.
While the final depositary receipts are
being prepared, we may order the depositary, in writing, to issue temporary depositary receipts substantially identical to the
final depositary receipts although not in final form. This will entitle the holders to all the rights relating to the final depositary
receipts. Final depositary receipts will be prepared without unreasonable delay, and the holders of the temporary depositary receipts
can exchange them for the final depositary receipts at our expense.
Dividends and Other Distributions
The depositary will distribute all cash
dividends or other cash distributions received for the preferred stock (less any taxes required to be withheld) to the record holders
of depositary shares representing the preferred stock in proportion to the number of depositary shares that the holders own on
the relevant record date. The depositary will distribute only the amount that can be distributed without attributing to any holder
of depositary shares a fraction of one cent. The balance not distributed will be added to and treated as part of the next sum that
the depositary receives for distribution to record holders of depositary shares.
If there is a distribution other than in
cash, the depositary will distribute property to the record holders of depositary shares that are entitled to it, unless the depositary
determines that it is not feasible to make this distribution. If this occurs, the depositary may, with our approval, sell the property
and distribute the net proceeds from the sale to the holders of depositary shares.
The deposit agreement will also contain
provisions relating to the manner in which any subscription or similar rights that we offer to holders of the preferred stock
will be made available to holders of depositary shares.
Conversion and Exchange
Unless the applicable prospectus supplement
indicates otherwise, the series of preferred stock underlying the depositary shares will not be convertible or exchangeable into
any other class or series of our capital stock.
Redemption of Deposited Preferred Stock
If a series of preferred stock underlying
the depositary shares is subject to redemption, we will redeem the depositary shares from the redemption proceeds received by the
depositary, in whole or in part, on the series of preferred stock held by the depositary. The redemption price per depositary share
will bear the same relationship to the redemption price per share of preferred stock that the depositary share bears to the underlying
preferred stock. When we redeem preferred stock held by the depositary, the depositary will redeem as of the same redemption date,
the number of depositary shares representing the preferred stock redeemed. If less than all the depositary shares are to be redeemed,
the redemption will be made in a manner that our board of directors decides is equitable.
From and after the date fixed for redemption,
the depositary shares called for redemption will no longer be outstanding. When the depositary shares are no longer outstanding,
all rights of the holders of depositary shares will cease, except the right to receive money or property that the holders of the
depositary shares were entitled to receive on redemption. The payments will be made when holders surrender their depositary receipts
to the depositary.
Voting of Deposited Preferred Stock
Upon receipt of notice of any meeting at
which the holders of the preferred stock are entitled to vote, the depositary will mail the information contained in the notice
to the record holders of the depositary shares relating to the preferred stock. Each record holder of the depositary shares on
the record date (which will be the same date as the record date for the preferred stock) will be entitled to instruct the depositary
on how the preferred stock underlying the holder’s depositary shares should be voted. The depositary will try, if practicable,
to vote the number of shares of preferred stock underlying the depositary shares according to the instructions received, and we
will take all action that the depositary may consider necessary to enable the depositary to do so. The depositary will not vote
any preferred stock if it does not receive specific instructions from the holders of depositary shares relating to the preferred
stock.
DESCRIPTION OF WARRANTS OR OTHER RIGHTS
We may issue warrants or other rights for
the purchase of common stock, preferred stock and debt securities. Warrants or other rights may be issued separately or together
with common stock, preferred stock or debt securities offered by any prospectus supplement and may be attached to or separate from
such common stock, preferred stock or debt securities. Each series of warrants or other rights will be issued under a separate
warrant agreement to be entered into between us and a bank or trust corporation, as warrant agent, all as set forth in the prospectus
supplement relating to the particular issue of offered warrants or other rights. In a prospectus supplement, we will inform you
of the exercise price and other specific terms of any such warrants or other rights, including whether our or your obligations,
if any, under any warrants or other rights may be satisfied by delivering or purchasing the underlying securities or their cash
value.
DESCRIPTION OF PURCHASE CONTRACTS
We may issue purchase contracts, including
purchase contracts issued as part of a unit with one or more other securities, for the purchase or sale of our debt securities,
preferred stock, depositary shares or common stock. The price of our debt securities or price per share of common stock, preferred
stock or depositary shares, as applicable, may be fixed at the time the purchase contracts are issued or may be determined by reference
to a specific formula contained in the purchase contracts. We may issue purchase contracts in such amounts and in as many distinct
series as we wish.
The applicable prospectus supplement may
contain, where applicable, the following information about the purchase contracts issued under it:
| · | whether the purchase contracts obligate the holder to purchase or sell, or both, our debt securities, common stock, preferred
stock or depositary shares, as applicable, and the nature and amount of each of those securities, or method of determining those
amounts; |
| · | whether the purchase contracts are to be prepaid or not; |
| · | whether the purchase contracts are to be settled by delivery, or by reference or linkage to the value, performance or level
of our common stock or preferred stock; |
| · | any acceleration, cancellation, termination or other provisions relating to the settlement of the purchase contracts; |
| · | United States federal income tax considerations relevant to the purchase contracts; and |
| · | whether the purchase contracts will be issued in fully registered global form. |
The applicable prospectus supplement will
describe the terms of any purchase contracts. The preceding description and any description of purchase contracts in the applicable
prospectus supplement does not purport to be complete and is subject to and is qualified in its entirety by reference to the purchase
contract agreement and, if applicable, collateral arrangements and depositary arrangements relating to such purchase contracts.
DESCRIPTION OF UNITS
We may issue units comprised of two or more
of the other securities described in this prospectus in any combination. Each unit will be issued so that the holder of the unit
is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a
holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the
unit may not be held or transferred separately, at any time or at any time before a specified date.
The applicable prospectus supplement may
describe:
| · | the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances
those securities may be held or transferred separately; |
| · | any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the
units; |
| · | the terms of the unit agreement governing the units; |
| · | United States federal income tax considerations relevant to the units; and |
| · | whether the units will be issued in fully registered or global form. |
The preceding description and any description
of units in the applicable prospectus supplement does not purport to be complete and is subject to and is qualified in its entirety
by reference to the form of unit agreement which will be filed with the SEC in connection with the offering of such units, and,
if applicable, collateral arrangements and depositary arrangements relating to such units.
DESCRIPTION OF SUBSCRIPTION RIGHTS
General
We may distribute subscription rights, which
may or may not be transferable, to the holders of our common stock, holders of any series of our preferred stock, holders of depository
shares or holders of our debt securities as of a record date set by our board of directors, at no cost to such holders. Each holder
will be given the right to purchase a specified number of whole shares of our common stock, preferred stock, depository shares
or debt securities for every share of our common stock, share of a series of preferred stock, depository shares or our debt securities
that the holder thereof owned on such record date, as set forth in the applicable prospectus supplement. The subscription rights
will be evidenced by subscription rights certificates, which may be in definitive or book-entry form. Each right will entitle the
holder to purchase shares of our common stock, a series of preferred stock, depository shares or our debt securities at a rate
and price to be established by our board of directors, as set forth in the applicable prospectus supplement. If holders of rights
wish to exercise their subscription rights, they must do so before the expiration date of the subscription rights offering, as
set forth in the applicable prospectus supplement. Upon the expiration date, the subscription rights will expire and will no longer
be exercisable, unless, in our sole discretion prior to the expiration date, we extend the subscription rights offering.
Exercise Price
Our board of directors will determine the
exercise price or prices for the subscription rights based upon a number of factors, including, without limitation, our business
prospects; our capital requirements; the price or prices at which an underwriter or standby purchasers may be willing to purchase
securities that remain unsold in the subscription rights offering; and general conditions in the securities markets, especially
for securities of financial institutions.
The subscription price may or may not reflect
the actual or long-term fair value of the common stock, preferred stock, depository shares or debt securities offered in the subscription
rights offering. We provide no assurances as to the market values or liquidity of any subscription rights issued, or as to whether
or not the market prices of the common stock, preferred stock, depository shares or debt securities subject to the subscription
rights will be more or less than the subscription rights’ exercise price during the term of the rights or after the rights
expire.
Exercising Rights; Fees and Expenses
The manner of exercising subscription rights
will be set forth in the applicable prospectus supplement. Any subscription agent or escrow agent will be set forth in the applicable
prospectus supplement. We will pay all fees charged by any subscription agent and escrow agent in connection with the distribution
and exercise of subscription rights. Subscription rights holders will be responsible for paying all other commissions, fees, taxes
or other expenses incurred in connection with their transfer of subscription rights that are transferable. Neither we nor the subscription
agent will pay such expenses.
Expiration of Rights
The applicable prospectus supplement will
set forth the expiration date and time (“Expiration Date”) for exercising subscription rights. If holders of subscription
rights do not exercise their subscription rights prior to such time, their subscription rights will expire and will no longer be
exercisable and will have no value. We will extend the Expiration Date as required by applicable law and may, in our sole discretion,
extend the Expiration Date. If we elect to extend the Expiration Date, we will issue a press release announcing such extension
prior to the scheduled Expiration Date.
Withdrawal and Termination
We may withdraw the subscription rights
offering at any time prior to the Expiration Date for any reason. We may terminate the subscription rights offering, in whole or
in part, at any time before completion of the subscription rights offering if there is any judgment, order, decree, injunction,
statute, law or regulation entered, enacted, amended or held to be applicable to the subscription rights offering that in the sole
judgment of our board of directors would or might make the subscription rights offering or its completion, whether in whole or
in part, illegal or otherwise restrict or prohibit completion of the subscription rights offering. We may waive any of these conditions
and choose to proceed with the subscription rights offering even if one or more of these events occur. If we terminate the subscription
rights offering, in whole or in part, all affected rights will expire without value, and all subscription payments received by
the subscription agent will be returned promptly without interest.
Rights of Subscribers
Holders of subscription rights will have
no rights as holders with respect to our common stock, preferred stock, depository shares or debt securities for which the rights
may be exercised until they have exercised their rights by payment in full of the exercise price and in the manner provided in
the applicable prospectus supplement, and such common stock, preferred stock, depository shares or debt securities, as applicable,
have been issued to such persons. Holders of subscription rights will have no right to revoke their subscriptions or receive their
monies back after they have completed and delivered the materials required to exercise their subscription rights and have paid
the exercise price to the subscription agent. All exercises of rights will be final and cannot be revoked by the holder of rights.
Regulatory Limitations
We will not be required to issue any person
or group of persons shares of our common stock, preferred stock, depository shares or debt securities pursuant to the subscription
rights offering if, in our sole opinion, such person would be required to give prior notice to or obtain prior approval from, any
state or federal governmental authority to own or control such securities if, at the time the rights offering is scheduled to expire,
such person has not obtained such clearance or approval in form and substance reasonably satisfactory to us.
Standby Agreements
We may enter into one or more separate agreements
with one or more standby underwriters or other persons to purchase, for their own account or on our behalf, our common stock, preferred
stock, depository shares or debt securities not subscribed for in the subscription rights offering. The terms of any such agreements
will be described in the applicable prospectus supplement.
GLOBAL SECURITIES
Unless otherwise indicated in the applicable
prospectus supplement, securities other than common stock will be issued in the form of one or more global certificates, or “global
securities,” registered in the name of a depositary or its nominee. Unless otherwise indicated in the applicable prospectus
supplement, the depositary will be DTC and the securities will be registered in the name of Cede & Co. No person that
acquires a beneficial interest in those securities will be entitled to receive a certificate representing that person’s interest
in the securities except as described herein or in the applicable prospectus supplement. Unless and until definitive securities
are issued under the limited circumstances described below, all references to actions by holders of securities issued in global
form will refer to actions taken by DTC upon instructions from its participants, and all references to payments and notices to
holders will refer to payments and notices to DTC or Cede & Co., as the registered holder of these securities.
DTC is a limited-purpose trust company organized
under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of
the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and
a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities
that DTC participants deposit with DTC. DTC also facilitates the settlement among DTC participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in DTC participants’
accounts, thereby eliminating the need for physical movement of certificates. DTC participants include securities brokers and dealers,
banks, trust companies and clearing corporations, and may include other organizations. DTC is a wholly owned subsidiary of the
Depository Trust & Clearing Corporation, or DTCC. DTCC, in turn, is owned by a number of DTC’s participants and
subsidiaries of DTCC as well as by the New York Stock Exchange, Inc., the American Stock Exchange, LLC and the Financial Industry
Regulatory Authority, Inc. Indirect access to the DTC system also is available to others such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. The
rules applicable to DTC and DTC participants are on file with the SEC.
Persons that are not participants or indirect
participants but desire to purchase, sell or otherwise transfer ownership of, or other interests in, securities may do so only
through participants and indirect participants. Under a book-entry format, holders may experience some delay in their receipt of
payments, as such payments will be forwarded by our designated agent to Cede & Co., as nominee for DTC. DTC will forward
such payments to its participants, who will then forward them to indirect participants or holders. Holders will not be recognized
by the relevant registrar, transfer agent, trustee or warrant agent as registered holders of the securities entitled to the benefits
of our certificate of incorporation or the applicable indenture, warrant agreement or other applicable security. Beneficial owners
that are not participants will be permitted to exercise their rights only indirectly through and according to the procedures of
participants and, if applicable, indirect participants.
Under the rules, regulations and procedures
creating and affecting DTC and its operations as currently in effect, DTC will be required to make book-entry transfers of securities
among participants and to receive and transmit payments to participants. DTC rules require participants and indirect participants
with which beneficial securities owners have accounts to make book-entry transfers and receive and transmit payments on behalf
of their respective account holders.
Because DTC can act only on behalf of participants,
who in turn act only on behalf of participants or indirect participants, and certain banks, trust companies and other persons approved
by it, the ability of a beneficial owner of securities issued in global form to pledge such securities to persons or entities that
do not participate in the DTC system may be limited due to the unavailability of physical certificates for these securities.
DTC will take any action permitted to be
taken by a registered holder of any securities under our certificate of incorporation or the relevant indenture, warrant agreement,
or other applicable security only at the direction of one or more participants to whose accounts with DTC such securities are credited.
Unless otherwise indicated in the applicable
prospectus supplement, a global security will be exchangeable for the relevant definitive securities registered in the names of
persons other than DTC or its nominee only if:
| · | DTC notifies us that it is unwilling or unable to continue as depositary for that global security or if DTC ceases to be a
clearing agency registered under the Exchange Act when DTC is required to be so registered; |
| · | we execute and deliver to the relevant registrar, transfer agent, trustee and/or warrant agent an order complying with the
requirements of the applicable indenture, warrant agreement, or other security that the global security will be exchangeable for
definitive securities in registered form; or |
| · | there has occurred and is continuing a default in the payment of any amount due in respect of the securities or, in the case
of debt securities, an event of default or an event that, with the giving of notice or lapse of time, or both, would constitute
an event of default with respect to these debt securities. |
Any global security that is exchangeable
under the preceding sentence will be exchangeable for securities registered in such names as DTC directs.
Upon the occurrence of any event described
in the preceding paragraph, DTC is generally required to notify all participants of the availability of definitive securities.
Upon DTC surrendering the global security representing the securities and delivery of instructions for re-registration, the registrar,
transfer agent, trustee or warrant agent, as the case may be, will reissue the securities as definitive securities, and then such
persons will recognize the holders of such definitive securities as registered holders of securities entitled to the benefits of
our certificate of incorporation or the relevant indenture, warrant agreement or other security.
Redemption notices will be sent to Cede &
Co. as the registered holder of the global securities. If less than all of a series of securities are being redeemed, DTC will
determine the amount of the interest of each direct participant to be redeemed in accordance with its then current procedures.
Except as described above, the global security
may not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or
to a successor depositary we appoint. Except as described above, DTC may not sell, assign, transfer or otherwise convey any beneficial
interest in a global security evidencing all or part of any securities unless the beneficial interest is in an amount equal to
an authorized denomination for these securities.
The information in this section concerning
DTC and DTC’s book-entry system has been obtained from sources that we believe to be accurate, but we assume no responsibility
for the accuracy thereof. None of us, any trustees, any registrar and transfer agent or any warrant agent, or any agent of any
of them, will have any responsibility or liability for any aspect of DTC’s or any participant’s records relating to,
or for payments made on account of, beneficial interests in a global security, or for maintaining, supervising or reviewing any
records relating to such beneficial interests.
Secondary trading in notes and debentures
of corporate issuers is generally settled in clearing-house or next-day funds. In contrast, beneficial interests in a global security,
in some cases, may trade in the DTC’s same-day funds settlement system, in which secondary market trading activity in those
beneficial interests would be required by DTC to settle in immediately available funds. There is no assurance as to the effect,
if any, that settlement in immediately available funds would have on trading activity in such beneficial interests. Also, settlement
for purchases of beneficial interests in a global security upon the original issuance of the security may be required to be made
in immediately available funds.
PLAN OF DISTRIBUTION
We may sell our securities through underwriters
or dealers, directly to purchasers, through agents, or through any combination thereof.
Each time that we use this prospectus to
sell our securities, we will also provide a prospectus supplement that contains the specific terms of the offering. The prospectus
supplement will set forth the terms of the offering of such stock, including:
| · | the name or names of any underwriters, dealers or agents and the type and amounts of securities underwritten or purchased by
each of them; |
| · | the public offering price of the securities and the proceeds to us and any discounts, commissions or concessions allowed or
reallowed or paid to dealers; and |
| · | any public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time
to time. |
If underwriters are used in the sale of
any securities, the securities will be acquired by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at
the time of sale. The securities may be either offered to the public through underwriting syndicates represented by managing underwriters,
or directly by underwriters. Generally, the underwriters’ obligations to purchase the securities will be subject to certain
conditions precedent. The underwriters will be obligated to purchase all of the securities if they purchase any of the securities.
We may sell the securities through agents
from time to time. The prospectus supplement will name any agent involved in the offer or sale of our securities and any commissions
we pay to them. Generally, any agent will be acting on a best efforts basis for the period of its appointment.
We may authorize underwriters, dealers or
agents to solicit offers by certain purchasers to purchase our securities at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. The contracts
will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth any
commissions or discounts we pay for solicitation of these contracts.
Agents and underwriters may be entitled
to indemnification by us against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribution with respect to payments which the agents or underwriters may be required to make in respect thereof. Agents
and underwriters may be customers of, engage in transactions with, or perform services for us in the ordinary course of business.
We may enter into derivative transactions
with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If
the applicable prospectus supplement indicates in connection with those derivatives then the third parties may sell securities
covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party
may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings
of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of
securities. The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus
supplement (or a post-effective amendment).
LEGAL OPINION
The validity of the securities that may
be offered will be passed upon for us by Luse Gorman, PC, Washington, D.C.
EXPERTS
The consolidated financial statements of
Berkshire Hills Bancorp, Inc. as of December 31, 2019 and 2018 and for each of the three years in the period ended December 31,
2019 have been audited by Crowe LLP, an independent registered public accounting firm, as set forth in their report appearing
in our Annual Report on Form
10-K for the year ended December 31, 2019 and incorporated in this registration statement by reference. Such consolidated
financial statements have been so incorporated in reliance upon their authority as experts in accounting and auditing.
$
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%
Fixed-to-Floating Rate Subordinated Notes due 2032
PRELIMINARY PROSPECTUS
SUPPLEMENT
Joint Bookrunning
Managers
Keefe,
Bruyette & Woods
A Stifel
Company |
|
PNC FIG Advisory,
part of PNC Capital Markets LLC |
,
2022
Berkshire Hills Bancorp (NYSE:BHLB)
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