SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

__________________

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  October 19, 2018

CITIZENS COMMUNITY BANCORP, INC.
(Exact name of registrant as specified in its charter)

Maryland
(State or other jurisdiction of incorporation)

001-33003
 
20-5120010
(Commission File Number)
 
(I.R.S. Employer I.D. Number)

2174 EastRidge Center, Eau Claire,
Wisconsin
 
 
54701
(Address of Principal Executive Offices)
 
(Zip Code)

715-836-9994
(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 ( see General Instruction A.2. below):
 
  o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
  o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
 
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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 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter.)
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 





Item 1.01.      Entry into a Material Definitive Agreement
In connection with the Acquisition described in Item 2.01 below, on October 19, Citizens Community Bancorp, Inc. a Maryland corporation (the “Company”), United Bancorporation (“Parent”) and United Bank, a Wisconsin chartered bank and wholly-owned subsidiary of Parent (“United Bank”), entered into an amendment (the “Amendment”) to the Stock Purchase Agreement, dated as of June 20, 2018 (the “Stock Purchase Agreement”), among the Company, Parent and United Bank.
The Amendment amends certain provisions in the Stock Purchase Agreement to, among other things, modify the purchase price adjustment mechanism and the indemnification obligations of Parent with respect to certain contractual obligations of United Bank.
The foregoing summary of the Amendment and the transactions contemplated thereby does not purport to be complete and is subject to and qualified in its entirety by the full text of the Amendment, which is filed as Exhibit 2.2 to this Current Report on Form 8-K, and the Stock Purchase Agreement, which is filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on June 21, 2018, and which are incorporated herein by reference.
Item 2.01      Completion of Acquisition or Disposition of Assets.
On October 19, 2018, the Company completed its previously announced acquisition (the “Acquisition”) of United Bank pursuant to the Stock Purchase Agreement, as amended.
Pursuant to the Stock Purchase Agreement, as amended, the Company acquired 100% of the common stock of United Bank from Parent for the purchase price of approximately $50.7 million, plus approximately $0.4 million in closing date purchase price adjustments as provided in the Stock Purchase Agreement, as amended, for a total cash consideration of approximately $51.1 million. Of the cash consideration to be paid to Parent in the Acquisition, approximately $44.3 million was paid in cash upon the closing of the Acquisition, and approximately $6.8 million was set aside in escrow or held by the Company for the purposes of funding certain post-closing purchase price adjustments and future indemnity claims in accordance with the Stock Purchase Agreement, as amended. At the closing of the Acquisition, United Bank became a wholly-owned subsidiary of the Company.
In connection with the Acquisition, the Company merged United Bank with and into Citizens Community Federal, N.A. (“CCF Bank”), a federally-chartered national bank and a wholly-owned subsidiary of the Company, with CCF Bank surviving the merger.
The foregoing summary of the Stock Purchase Agreement, as amended, and the transactions contemplated thereby does not purport to be complete and is subject to and qualified in its entirety by the full text of the Amendment, which is filed as Exhibit 2.2 to this Current Report on Form 8-K, and the Stock Purchase Agreement, which is filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on June 21, 2018, and which are incorporated herein by reference.
Item 8.01      Other Events.
On October 22, 2018, the Company issued a press release announcing the closing of the Acquisition, which is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 9.01      Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The financial statements required by this item will be filed by amendment to this Current Report on Form 8-K not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
The pro forma financial information required by this item will be filed by amendment to this Current Report on Form 8-K not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.





(d)      Exhibits:






SIGNATURES

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

 
 
CITIZENS COMMUNITY BANCORP, INC.
 
 
 
Date: October 22, 2018
 
By:
 
/s/ James S. Broucek
 
 
 
 
James S. Broucek
 
 
 
 
Chief Financial Officer



Exhibit 2.2

SECOND AMENDMENT TO STOCK PURCHASE AGREEMENT

THIS SECOND AMENDMENT TO STOCK PURCHASE AGREEMENT (this “ Amendment ”) is made to be effective as of October 19, 2018, by and among Citizens Community Bancorp, Inc., a Maryland corporation, United Bank, a Wisconsin chartered bank, and United Bancorporation, a South Dakota corporation. The parties to this Amendment may be referred to in this Amendment individually as a “ Party ” and collectively as the “ Parties .”
RECITALS
A.    The Parties are parties to that certain Stock Purchase Agreement dated June 20, 2018, as amended by that certain First Amendment to Stock Purchase Agreement dated August 13, 2018 (the “ Agreement ”).
B.    The Parties desire to amend the Agreement as set forth herein.
NOW, THEREFORE , in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows:
AMENDMENT
1. Deletion of Definitions . The following definitions are hereby deleted from Section 1.01 of the Agreement: “ Accounting Referee, ” “ Determination Date ”, “ Determination Date Balance Sheet ”, “ Equity Adjustment Amount ”, and “ Equity Amount ”.
2.      Additions to Definitions . The following definitions are hereby added to Section 1.01 of the Agreement:
“ Accounting Referee ” has the meaning set forth in Section 2.04(c) .

“ Closing Date Equity ” means the Stockholders Equity as of the Closing Date.

“ Closing Date Equity Adjustment Amount ” means the difference between the Closing Date Equity and the Determination Date Equity.

“ Closing Date Purchase Price ” means fifty million seven hundred thousand dollars ($50,700,000) PLUS OR MINUS the Determination Date Equity Adjustment Amount.

“ Determination Date ” has the meaning set forth in Section 2.04(a) .

“ Determination Date Balance Sheet ” has the meaning set forth in Section 2.04(a) .

“ Determination Date Equity ” means the Stockholders Equity as of the Determination Date.




“ Determination Date Equity Adjustment Amount ” means the difference between the Determination Date Equity and the Base Equity Amount.

“ True-Up Statement ” has the meaning set forth in Section 2.04(b) .

3.      Amendment to Section 2.02 . Section 2.02 of the Agreement is hereby deleted in its entirety and replaced with the following:
“    2.02     Purchase Price . The purchase price to be paid by Purchaser to Shareholder for the Bank Common Stock (the “ Purchase Price ”) shall be equal to the sum of:
(a)     fifty million seven hundred thousand dollars ($50,700,000), PLUS OR MINUS
(b)     the Determination Date Equity Adjustment Amount, PLUS OR MINUS
(c)    the Closing Date Equity Adjustment Amount.”
4.      Amendment to Section 2.03 . Section 2.03 of the Agreement is hereby deleted in its entirety and replaced with the following:
“2.03     Payment Terms . The Closing Date Purchase Price shall be paid by Purchaser to Shareholder at the Closing in immediately available funds as follows:
(a)     Purchaser shall deposit, or shall cause to be deposited, (i) five million dollars ($5,000,000) (the “ Indemnification Escrow Amount ”) into an escrow account (the “ Indemnification Escrow Account ”) established pursuant to the terms of an Escrow Agreement to be entered into at the Closing among Purchaser, Shareholder, and Bankers’ Bank, a Wisconsin state bank, as escrow agent (the “ Escrow Agent ”), substantially in the form attached hereto as Exhibit A (the “ Escrow Agreement ”), in order to support Shareholder’s indemnification obligations under Article VII hereof.
(b)    $1,800,250.00 of the Purchase Price shall be deposited in an account opened by Shareholder with Citizens Community Federal National Association that will bear interest at a floating rate (adjusted monthly) equal to .4% less than the federal funds rate quoted by Bankers’ Bank, which account may not be withdrawn by Shareholder without Purchaser’s consent until Shareholder has paid all Liabilities for termination of the MasterCard Agreement pursuant to Section 7.03(a)(5)(i) of the Agreement.
(c)    The balance of the Closing Date Purchase Price shall be paid by Purchaser to Seller.”

5.      Amendment to Section 2.04 . Section 2.04 of the Agreement is hereby deleted in its entirety and replaced with the following:

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“     2.04     Purchase Price Adjustments .
(a)    At least ten (10) Business Days prior to the Closing Date, Sellers shall deliver to Purchaser an unaudited consolidated balance sheet of the Bank as of the close of business on the Business Day that is the last Business Day of the calendar month immediately preceding the calendar month in which the Closing is scheduled to occur (such date, the “ Determination Date ”, and the balance sheet, the “ Determination Date Balance Sheet ”), along with Sellers’ calculation of the Determination Date Equity, prepared on a basis consistent with the accounting practices and policies used in the preparation of the Bank Financial Statements. Sellers shall afford Purchaser and its Representatives the opportunity to review all work papers and documentation used by Sellers in preparing the Determination Date Balance Sheet and Sellers’ calculation of the Determination Date Equity. The parties acknowledge and agree that the Closing Date Purchase Price, which will be paid by Purchaser at the Closing pursuant to Section 2.03, shall be based on the Determination Date Balance Sheet and Seller’s calculation of the Determination Date Equity.
(b)    As promptly as practicable, but no later than sixty (60) days after the Closing Date, Purchaser shall cause to be prepared and delivered to Shareholder a proposed final consolidated balance sheet of the Company as of the close of business on the Closing Date (the “ Closing Date Balance Sheet ”) and a certificate based on the Closing Date Balance Sheet setting forth Purchaser’s calculation of the Closing Date Equity and any adjustments to the Determination Date Balance Sheet and Determination Date Equity that Purchaser deems necessary (such certificate and the Closing Date Balance Sheet, the “ True-Up Statement ”). The True-Up Statement shall be prepared on a basis consistent with the accounting practices and policies used in the preparation of the Bank Financial Statements. Purchaser shall afford Shareholder and its Representatives the opportunity to review all work papers and documentation used by Purchaser in preparing the True-Up Statement.
(c)    Except as otherwise expressly provided herein, the True-Up Statement shall be final and binding on the parties hereto, unless, within fifteen (15) days after receipt by Shareholder of the True-Up Statement, Shareholder shall notify Purchaser in writing of its disagreement with any amount included therein or omitted therefrom (each dispute, an “ Objection ”), in which case, if the parties are unable to resolve the Objections within fifteen (15) Business Days of the receipt by Purchaser of such notice, such unresolved Objections shall be determined by a regionally recognized independent accounting firm selected by mutual agreement between Shareholder and Purchaser (the “ Accounting Referee ”). The Accounting Referee shall be instructed to resolve the Objections within ten (10) Business Days of engagement, to the extent reasonably practicable. The determination of the Accounting Referee shall be final and binding on the parties hereto. The fees and costs of the Accounting Referee shall be payable fifty percent (50%) by Shareholder and fifty percent by Purchaser.
(d)    Not later than the close of business on the second (2nd) Business Day following the final determination of the True-Up Statement pursuant to Section 2.04(c)

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(the “ Adjustment Payment Date ”), Shareholder and Purchaser shall effect the transfer of cash as may be necessary to reflect the difference, positive or negative, of (x) the Closing Date Equity Adjustment Amount (based on the Closing Date Equity), MINUS (y) the Determination Date Equity Adjustment Amount (based on the Determination Date Equity, as adjusted by Purchaser pursuant to Section 2.04(b)), as set forth on the True-Up Statement, as finally determined. If Purchaser is due cash pursuant to this Section 2.04(d) , then Shareholder and Purchaser shall execute and deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to release the amount of such cash from the Indemnification Escrow Account to Purchaser. If Shareholder is due cash pursuant to this Section 2.04(d) , Purchaser shall pay Shareholder the amount of cash due Shareholder.
(e)    Any adjustments provided for in this Section 2.04 shall be deemed, for purposes of Taxes, to be adjustments to the Purchase Price.
(f)     For clarity, the Determination Date Balance Sheet and the Closing Date Balance Sheet shall reflect the Bank’s payment or accrual of (i) all fees and expenses incurred (or estimated to be incurred) in connection with the consummation of the transactions contemplated by this Agreement, (including all fees payable to the Bank’s financial advisor, legal counsel, and accountants), and (ii) all vendor or funding termination or breakage penalties, management change-in-control or retention payments, employee severance costs, and any payments or distributions under any Bank Plan due as a result of this Agreement or the transactions contemplated by this Agreement.”
6.      Amendment to Article III . Article III is hereby amended by adding the following sentence after the last sentence in Article III:
“The Closing shall be effective at 5 p.m. (Central Time) on the Closing Date.”
7.      Amendments to Section 6.10(a)(i) . Section 6.10(a)(i) of the Agreement is hereby deleted in its entirety and replaced with the following:
“    (i)     terminate, effective immediately prior to the Closing, the Bank’s participation in and liability for benefits under such plans which will not be retained by Purchaser, except that the Bank will continue to participate, with the employer portion of the premiums at the Bank’s expense, in Shareholder’s group medical plan and flexible benefits plan through December 31, 2018, at which time the Bank’s participation in such benefit plans shall terminate,”
8.      Amendments to Section 6.10(f) . Section 6.10(f) of the Agreement is hereby deleted in its entirety and replaced with the following:
“    (f)     Continuation of coverage required under COBRA will be provided under Shareholder’s group medical plan to all employees and former employees of the Bank, including any beneficiaries who are or become “M&A Qualified Beneficiaries” (as defined in Treasury Regulations §54.4980B-9) as a result of the consummation of the transactions contemplated by this Agreement, through December 31, 2018, provided,

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however, that Bank will be responsible for collecting from COBRA participants and remitting all such premiums. Effective January 1, 2019, Purchaser will be responsible for providing continuation coverage required under COBRA to all employees and former employees of the Bank, including any beneficiaries who are or become “M&A Qualified Beneficiaries” (as defined in Treasury Regulations §54.4980B-9) as a result of the consummation of the transactions contemplated by this Agreement”

9.      Amendment to Section 6.18 . Section 6.18 to the Agreement is hereby deleted and replaced with the following:
“    Section 6.18     MasterCard Covenant . CCF Bank will continue to operate under the MasterCard Agreement for a period of time following the Closing. By April 1, 2019, CCF Bank will cease to operate under, and CCF Bank and MasterCard will terminate, the MasterCard Agreement. Purchaser and Shareholder will cooperate to negotiate termination of the MasterCard Agreement and will use commercially reasonable efforts to minimize the early termination fees associated therewith. All Liabilities resulting from the termination of the MasterCard Agreement will be the responsibility of Shareholder pursuant to Section 7.03(a)(5)(i) of the Agreement.
10.      Amendments to Section 8.10(d) . Section 8.10(d) of the Agreement is hereby deleted in its entirety and replaced with the following:
“    (d)      Termination of Participation in Employee Benefit Plans . The Bank shall terminate participation in all employee benefit plans sponsored or maintained by any entity other than the Bank including, but not limited to, Shareholder, except that the Bank will continue to participate, at the Bank’s expense, in Shareholder’s group medical plan and flexible benefits plan through December 31, 2018, at which time the Bank’s participation in such benefit plans shall terminate.”

11.      Terms of Agreement; Cooperation . Except as expressly set forth in this Amendment, all other terms and provisions of the Agreement will remain in full force and effect.
12.      Entire Agreement . This Amendment constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations among the Parties, written or oral, that may have related in any way to the subject matter hereof.
13.      Counterparts; Electronic Delivery . This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Amendment delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Amendment.
[Signature Page Follows]

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IN WITNESS WHEREOF , the Parties have executed this Amendment to be effective as of the date first set forth above.


CITIZENS COMMUNITY BANCORP, INC.
By: /s/ Stephen Bianchi
Name: Stephen Bianchi
Title: President and CEO

UNITED BANK
By: /s/ Trevor Bohland
Name: Trevor Bohland
Title: President and CEO

UNITED BANCORPORATION
By: /s/ Greg LeGare
Name: Greg LeGare
Title: President










Exhibit 99.1
CCFUNITEDMERGERIMAGE1.JPG

United Bank Joins Forces
with CCFBank™

EAU CLAIRE, WIS. (10/19/18) – United Bank customers in Northwest Wisconsin will soon see a new brand in their local markets. Citizens Community Federal™ (CCFBank™) and United Bank have completed their merger combining the two financial institutions.

The acquisition was announced earlier in June pursuant to which Citizens Community Bancorp, Inc. (NASDAQ: CZWI) acquired the stock of United Bank from United Bancorporation and immediately merged United Bank into CCFBank in a transaction valued at approximately $50.7 million. United Bank brings $268.5 million in assets, $240 million in deposits and $214 million in loans to the CCFBank franchise. The combined company, headquartered in Altoona, WI, is expected to have over $1.24 billion in total assets with 27 locations in northwest Wisconsin and southern Minnesota.
 
CCFBank CEO and President Steve Bianchi sees the joining of the two companies as a great opportunity for their combined customers to benefit. “We look forward to welcoming United Bank customers, employees and communities to the CCFBank family,” Bianchi said. “We are excited about combining the two independent community banking franchises to deliver enhanced products and services that customers desire. The enhanced product line and services, along with the knowledge and resources of our staff will align with our goal of “Making More Possible” for our customers, communities and stakeholders.”

United Bank’s President and CEO Trevor Bohland added, “Our team looks forward to growing and thriving with the CCFBank team. Given the challenges and opportunities of community banking today, the combined bank will be better positioned to meet the needs of our communities. We share a common set of values and a vision that will provide significant benefits to our customers and shareholders. The combined leadership teams have charted out a streamlined plan that will benefit all parties involved including a larger branch presence and expanded products and services.”

United Bank customers will continue to use the current United Bank products and services until the conversion of the banking systems in February, 2019. In the coming months, all United Bank customers will receive official communication from CCFBank that will provide important account information and timelines in which changes will occur.

Members of the communities United Bank has served are encouraged to visit their local branches with any questions they have about the merger. They may also call CCFBank at 800.590.9920 or 715.836.9999 from 8 a.m. to 5 p.m. on weekdays. Questions may also be emailed on the CCFBank website .

Find out more about CCFBank™: http://ccf.us

Media Contact
Steve Bianchi
CEO/President
Citizens Community Bancorp, Inc.
715.836.9994