UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

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

 

Date of Report – December 14, 2006

 

FIRST NATIONAL COMMUNITY BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

___________________

 

 

 

102 E. Drinker St. Dunmore, PA 18512

(Address of principal executive office and zip code)

 

(570) 346-7667

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions

 

 

 

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

 

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.133-4(c))

 

 

On December 14, 2006, First National Community Bancorp, Inc. (the “Company”) completed a private placement of $10,000,000 in aggregate principal amount of floating rate preferred securities (the “Trust Preferred Securities”) through a newly formed Delaware trust affiliate First National Community Statutory Trust I (the “Trust”). The Trust Preferred Securities mature on December 15, 2036, are redeemable at the Company’s option beginning after five years, and require quarterly distributions by the Trust to the holders of the Trust Preferred Securities. Distributions will be payable quarterly at a variable interest rate equal to the 3-month London Interbank Offered Rate (“LIBOR”) rate plus 1.67% per annum. The Trust simultaneously issued all of the Trust’s issued and outstanding common securities (the “Common Securities”) to the Company for a purchase price of $310,000.

 

The Trust used the proceeds from the sale of the Trust Preferred Securities together with the sale of the proceeds from the sale of the Common Securities to purchase $10,310,000 in aggregate principal amount of the Company’s unsecured floating rate junior subordinated debt securities due December 15, 2036 issued by the Company (the “Junior Subordinated Debt Securities”). The net proceeds to the Company from the sale of the Junior Subordinated Debt Securities will be used by the Company to fund the acquisition of a branch office in Honesdale, Pennsylvania which occurred on November 10, 2006.

 

The Junior Subordinated Debt Securities were issued pursuant to an Indenture (the “Indenture”) dated December 14, 2006 between the Company, as issuer, and Wilmington Trust Company, as trustee. The terms of the Junior Subordinated Debt Securities are substantially the same as the terms of the Trust Preferred Securities. The interest payments on the Junior Subordinated Debt Securities paid by the Company will be used by the Trust to pay the quarterly distributions to the holders of the Trust Preferred Securities. The Indenture permits the Company to defer interest payments on the Junior Subordinated Debt Securities (in which case the Trust will be entitled to defer distributions otherwise due on the Trust Preferred Securities) for up to 20 consecutive quarters, provided there is no event of default (as described in more detail below). During an extension period, the Company may not make certain distributions or payments as set forth in the Indenture.

 

The Junior Subordinated Debt Securities are subordinated to the prior payment of any other indebtedness of the Company that, by its terms, is not similarly subordinated. The Trust Preferred Securities will be recorded as a long-term liability on the Company’s balance sheet; however, for regulatory purposes the Trust Preferred Securities will be treated as Tier 1 or Tier 2 capital under the rulings of the Company’s primary regulator, the Federal Reserve Board.

 

The Junior Subordinated Debt Securities mature on December 15, 2036, but may be redeemed at the Company’s option at any time commencing after December 2011 or at any time upon certain special events, such as a change in the regulatory capital

treatment of the Junior Subordinated Debt Securities, the Trust being deemed an “Investment Company” under the Investment Company Act of 1940, as amended, or occurrence of certain adverse tax events. Except upon the occurrence of the certain events described above, the Company may redeem the Junior Subordinated Debt Securities at their aggregate principal amount, plus accrued interest, if any.

 

The Junior Subordinated Debt Securities may be declared immediately due and payable at the election of the trustee or holders of 25% of aggregate principal amount of the outstanding Junior Subordinated Debt Securities upon the occurrence of an event of default. An event of default generally means:

 

 

The Company has also entered into a Guarantee Agreement pursuant to which it has agreed to irrevocably and unconditionally guarantee, with respect to the Trust Preferred Securities and to the extent not paid by the Trust, accrued and unpaid distributions on the Trust Preferred Securities and the redemption price payable to the holders of the Trust Preferred Securities, in each case to the extent the Trust has funds available.

 

The terms of the Trust Preferred Securities are governed by an Amended and Restated Declaration of Trust (the “Declaration”) dated as of December 14, 2006, by and among the Company, Wilmington Trust Company, as Delaware and institutional trustee, and the Administrators named therein.

 

The foregoing description is qualified in its entirety by reference to the full text of the Declaration, a copy of which is attached hereto as Exhibit 10.1, the Indenture, a copy of which is attached hereto as Exhibit 10.2, and the Guarantee Agreement, a copy of which is attached hereto as Exhibit 10.3.

 

A copy of the press release announcing the placement of the Trust Preferred Securities is attached hereto as Exhibit 99.1.

 

The information required by this Item is included in Item 1.01 above, which is incorporated herein by reference.

 

 

Exhibit 10.1.Amended and Restated Declaration of Trust of First National Community Statutory Trust I, dated as of December 14, 2006, among First National Community Bancorp, Inc., as sponsor, the Delaware and institutional trustee named therein, and the administrators named therein.

 

Exhibit 10.2.     Indenture, dated as of December 14, 2006, between First National Community Bancorp, Inc., as issuer, and the trustee named therein, relating to the Junior Subordinated Debt Securities due 2036.

 

Exhibit 10.3     Guarantee Agreement, dated as of December 14, 2006, between First National Community Bancorp, Inc. and the guarantee trustee named therein.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

FIRST NATIONAL COMMUNITY BANCORP, INC.

 

 

William S. Lance, Treasurer

 

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