Unassociated Document
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
(Date of
earliest
event
reported): November 5,
2009
TierOne
Corporation
(Exact
name of registrant as specified in its charter)
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Wisconsin
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000-50015
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04-3638672
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(State
or other
jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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1235 “N” Street,
Lincoln, Nebraska 68508
(Address
of principal executive offices, including zip code)
(402)
475-0521
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
_______________________
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 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)
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
240.13e-4(c))
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Item
2.06.
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Material
Impairments.
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TierOne
Corporation (the "Company") is the holding company for TierOne Bank (the
"Bank"). On a quarterly basis, the Bank is required to file Thrift
Financial Reports ("TFRs") with the Office of Thrift Supervision (the
"OTS"). The OTS is the Bank's primary regulator. The TFR
requires the Bank to report various information, including financial statement
and supplemental data regarding the Bank's performance and financial condition
for and as of the quarter covered by the TFR.
On
November 5, 2009, the Bank filed its TFR for the quarter ended September 30,
2009. The TFR reflected a loan loss provision of approximately $120.2
million (which includes a total charge-off of $109.8 million) for the three
months ended September 30, 2009. The loan loss provision and the
charge-offs for the third quarter reflect (i) the results of the ongoing OTS
examination of the Bank; (ii) the receipt of recent, updated appraisals which
show continued deterioration of property values in selected markets; (iii)
aggressive steps undertaken by management to dispose of the Bank’s problem
assets; and (iv) management's subjective judgment as to continued deterioration
in the Bank's loan portfolio resulting from ongoing economic challenges
generally and, in particular, challenges in the real estate market.
In a Form
8-K filing dated October 13, 2009, the Company had previously disclosed that it
would be restating its financial statements as of and for the three-month and
six-month periods ended June 30, 2009. In the Form 8-K filing, the
Company reported that it expected an additional loan loss provision of $13.9
million (including a total charge-off of $10.6 million) for the three months
ended June 30, 2009. On November 5, 2009, the Bank filed an amended
TFR for the quarter ended June 30, 2009 and reported an increase to $17.4
million (including a total charge-off of $14.1 million) in the additional
loan loss provision for such quarter. The $3.3 million increase in
the additional loan loss provision resulted from the further review of the
Bank's loan portfolio that is being undertaken as the Company continues to
prepare its restated financial statements for inclusion in an amended Form 10-Q
for the quarter ended June 30, 2009.
The Bank
is currently subject to a supervisory agreement that it entered into with the
OTS on January 15, 2009. Among other things, the supervisory
agreement requires the Bank to maintain enhanced minimum capital requirements in
excess of those required of an institution deemed to be "well capitalized" by
the OTS. As a result of the financial performance reported in the
above-referenced TFRs, the Bank's minimum core capital ratio, as of June 30,
2009, was approximately 7.95%, which is below the elevated ratio of 8.50%
required by the supervisory agreement (the regulatory core capital ratio
normally required to be deemed "well capitalized" is 5.00%). The
Bank's total risk-based capital ratio, as of June 30, 2009, was approximately
10.66%, which is below the 11.00% required by the supervisory agreement (the
regulatory total risk-based capital ratio normally required to be deemed "well
capitalized" is 10.00%). With the additional loan loss provisions
discussed above, as of September 30, 2009, the Bank's core capital and total
risk-based capital ratios were approximately 4.00% and 6.09%,
respectively.
The Bank,
as of September 30, 2009, is below both the enhanced capital requirements set
forth in the supervisory agreement as well as the ratios normally required to be
deemed "well capitalized" by the OTS. The Bank's total risk-based
capital ratio of 6.09% as of September 30, 2009 results in the Bank being
classified as "undercapitalized." As a result of being
undercapitalized as of September 30, 2009, the Bank is required to submit a
capital restoration plan and is subject to various additional restrictions
provided by the terms of the Prompt Corrective Action regulations. It
is possible that the OTS may take additional actions as a result of the Bank’s
capital status and the ongoing examination of the Bank by the
OTS. The Company cannot currently predict what impact it may
experience as a result of the actions that may be taken by the OTS.
As part
of the Bank’s efforts to increase its capital, as previously disclosed the
Company and the Bank entered into a definitive agreement, dated
September 3, 2009 (the "Agreement"), to transfer deposits and sell selected
loans and other assets associated with 32 of the Bank’s branch offices to Great
Western Bank, a South Dakota-based subsidiary of National Australia
Bank. The increased capital expected to result from the
consummation of the transactions contemplated by the Agreement (which Agreement
is subject to, among other conditions, the receipt of regulatory approval),
combined with a reduction in risk-based assets due to the sale, is expected to
result in the Bank being deemed "adequately capitalized," but below the levels
required to be "well capitalized" or to be in compliance with the supervisory
agreement. In addition, there can be no assurances that the Bank will
be at least "adequately capitalized" upon consummation of the transactions
contemplated by the Agreement due to unforeseen or intervening events, including
possible further regulatory actions as a result of the OTS examination, nor
can there be any assurance that the Agreement will receive all
necessary regulatory and other approvals in order to be able to consummate
the transaction. The Bank is currently seeking to consummate the
transactions contemplated by the Agreement in the first quarter of 2010 but
there are no assurances that such schedule will be achieved. The closing of
the transaction is subject to customary conditions precedent, including
regulatory approval, several of which are beyond the Company’s ability to
control.
In
addition, The Worker, Homeownership and Business Assistance Act of 2009, passed
into law last week, contains a provision permitting companies to carryback 2008
or 2009 losses for five years and to obtain a refund of taxes previously
paid. The Bank intends to carryback losses that are expected to
result in a fourth quarter 2009 tax benefit to the Bank of approximately $26.5
million. However, the exact amount of the benefit is subject to
adjustment and may be significantly less than this amount.
Item
8.01. Other
Events.
As
previously reported, the Company is in the process of preparing an amended Form
10-Q for the quarter ended June 30, 2009. The amended Form 10-Q
will include restated financial statement as of and for the three-month and
six-month periods ended June 30, 2009. The restated financial
statements are required because the OTS directed the Bank to establish
additional loan loss provisions for the 2009 second quarter. The
Company intends to file the amended Form 10-Q as soon as practicable after
management has completed its reassessment of the Bank’s loan
portfolio. The delay in the preparation of the amended second quarter
Form 10-Q has also resulted in a delay in filing of the Company’s Form 10-Q for
the quarter ended September 30, 2009, which filing was due on
November 9, 2009. The Company is working diligently to file both
the amended second quarter Form 10-Q and the third quarter Form 10-Q as promptly
as possible. The Company will not, however, be able to make such
filings within the five calendar day grace period potentially available pursuant
to Rule 12b-25 under the Securities Exchange Act of 1934, as
amended.
* *
*
Statements contained in this report
which are not historical facts may be forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks and uncertainties which could
cause actual results to differ materially from those currently anticipated due
to a number of factors. Factors which could result in material
variations include, but are not limited to, issues that may arise relative to
loan loss provisions and charge-offs with respect to the Bank’s loan portfolio,
including actions stemming from the review of such portfolio and provisions by
regulators; actions taken by the regulators with respect to the Bank’s capital
position; any issues that may arise from the ongoing examination of the Bank by
the OTS; any issues that could impact management’s judgment as to the adequacy
of loan loss reserves; any issues related to the restatement of the Company’s
financial statements for the quarter ended June 30, 2009 and the
preparation of the financial statements for the quarter ended September 30,
2009; changes in asset quality and general economic conditions; events related
to the supervisory agreement, including compliance therewith, or actions by
regulators related thereto or as a result thereof; inability of the Bank and the
Company to comply with other provisions of the supervisory agreement; the
effects of complying with, or failure to comply with, the restrictions imposed
on the Bank under the Prompt Corrective Action regulations; inability to
achieve expected results pursuant to the Company’s plan to address asset
quality, restore long-term profitability and increase capital; further
deterioration in the Company’s loan portfolio; issues associated with receipt of
a tax benefit under The Worker, Homeownership and Business Assistance Act
of 2009; and issues associated with the closing of the transactions
contemplated by the branch purchase agreement with Great Western
Bank. In addition, the Company set forth certain risks in its reports
filed with the Securities and Exchange Commission, including its Annual Report
on Form 10-K for the fiscal year ended December 31, 2008 and current and
periodic reports filed with the Securities and Exchange Commission thereafter,
which could cause actual results to differ from those
projected. These factors should be considered in evaluating the
forward-looking statements and undue reliance should not be placed on such
statements. The Company undertakes no obligation to update these
forward-looking statements to reflect events or circumstances that occur after
the date on which such statements were made.
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.
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TIERONE
CORPORATION
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Date: November
10, 2009
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By:
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/s/
Gilbert G. Lundstrom |
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Gilbert
G. Lundstrom
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Chairman
of the Board and Chief Executive
Officer
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