First Commercial Bancshares, Inc. (the “Company”), parent company of First Commercial Bank and subsidiaries, announced the closing of the sale of $15 million aggregate principal amount of fixed-to-floating rate subordinated notes to certain qualified institutional buyers and institutional accredited investors as identified and placed by Piper Sandler & Co., the Company's sole placement agent for the notes, in a private placement transaction. Closing of the sale was completed on Wednesday, December 23, 2020.  The Company plans to use the proceeds from the issuance and sale of the notes to support the organic growth of First Commercial Bank, to pay off an existing line of credit, and for general corporate purposes.  

The notes have a maturity date of December 30, 2030, and carry a fixed rate of interest of 5.00% per annum for the first five years, payable semi-annually on June 30 and December 30 of each year beginning June 30, 2021 through December 30, 2025. Thereafter, the interest rate will reset quarterly to an interest rate per annum equal to the then-current three-month SOFR (Secured Overnight Financing Rate) plus 476 basis points, payable quarterly.  

The notes may be redeemed at the option of the Company, without penalty on or after December 30, 2025 or earlier in certain instances and after receipt of required regulatory approvals, if then required. The redemption price will be equal to 100% of the outstanding principal amount of the notes to be redeemed, plus any accrued and unpaid interest to but excluding the redemption date. The subordinated notes have been structured to qualify as Tier 2 capital for the Company for regulatory capital purposes. 

Piper Sandler & Co. served as the sole placement agent for this offering.  Jones Walker, LLP served as legal counsel to the Company and Butler Snow LLP served as legal counsel to the placement agent.

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