JD Bancshares, Inc. Announces Completion of $30.0 Million Subordinated Debt Offering

Rhea-AI Summary

JD Bancshares, Inc. (OTCQX:JDVB) has successfully closed a $30 million private placement of fixed-to-floating rate subordinated notes. The capital will be used to redeem $17.5 million of existing debt at 6.75% and for general corporate needs, including potential share repurchases. The notes, with a maturity date of December 15, 2031, offer a fixed interest rate of 3.75% for the first five years. This financial maneuver is expected to enhance the company's growth strategies without diluting current shareholder equity.

Positive

• Successful closure of a $30 million private placement enhances capital structure.
• Current debt reduction from 6.75% to a fixed interest rate of 3.75% improves financial stability.
• Non-dilutive capital infusion allows for potential share repurchases and supports growth strategies.

Negative

• None.

JENNINGS, LA / ACCESSWIRE / December 15, 2021 / JD Bancshares, Inc. (OTCQX:JDVB), the parent company of JD Bank, today announced the closing of a $30.0 million private placement of fixed-to-floating rate subordinated notes. The Company intends to use the net proceeds to redeem existing debt of $17.5 million, currently priced at 6.75%, and for general corporate purposes, which may include share repurchases and providing capital to the Bank to support growth.

The notes have a maturity date of December 15, 2031 and carry a fixed rate of interest of 3.75% for the first five years. Interest will be paid semi-annually beginning June 15, 2022. On December 15, 2026, the interest rate will reset quarterly to an interest rate per annum equal to the then current Three-Month Term Secured Overnight Financing Rate (SOFR) plus 264 basis points, payable quarterly in arrears. The notes include a right of prepayment, without penalty, on or after December 15, 2026. The subordinated notes have been structured to qualify as Tier 2 capital for regulatory purposes.

President and Chief Executive Officer Bruce W. Elder discussed the offering: "We are pleased to announce the successful completion of our subordinated debt offering. This new capital is non-dilutive to current shareholders and enhances our ability to continue to execute our growth strategies. The current low interest rate environment allowed us to add an additional $12.5 million in subordinated debt to that which is being redeemed without incurring any additional interest expense."

Piper Sandler & Co served as the sole placement agent for the private offering. The Company was advised by Fenimore Kay Harrison, LLP.

JD Bancshares, Inc. is the bank holding company of JD Bank, a state chartered bank headquartered in Jennings, Louisiana. JD Bank has been serving the citizens of southwest Louisiana since 1947 and offers a variety of personal and commercial lending and deposit products through both physical and digital delivery channels. The Bank also offers both trust and investment services. JD Bank operates through 23 full service branch offices located along the Interstate 10 corridor from Lake Charles to Lafayette, Louisiana. JD Bancshares, Inc. Investor Relations may be accessed on its website at jdbank.com.

JD Bancshares, Inc. (OTCQX:JDVB) trades on the OTCQX Best Market. Companies meet high financial standards, follow best practice corporate governance, demonstrate compliance with U.S. securities laws, and have a professional third-party sponsor introduction. Investors can find current financial disclosure and Real-Time Level 2 quotes for the Company on otcmarkets.com.

CONTACT:

JD Bancshares, Inc.
Bruce Elder (CEO) 337-246-5399
Paul Brummett (CFO) 337-246-5395

SOURCE: JD Bancshares, Inc.

View source version on accesswire.com:
https://www.accesswire.com/677823/JD-Bancshares-Inc-Announces-Completion-of-300-Million-Subordinated-Debt-Offering

FAQ

What is the purpose of JD Bancshares' recent $30 million subordinated notes offering?

The $30 million from the subordinated notes will be used to redeem $17.5 million of existing debt and for general corporate purposes, including share repurchases.

What are the interest rates associated with JD Bancshares' new subordinated notes?

The subordinated notes feature a fixed interest rate of 3.75% for the first five years, after which the rate will reset quarterly.

When do the interest payments for JD Bancshares' subordinated notes start?

Interest payments on the subordinated notes will commence on June 15, 2022.

Who advised JD Bancshares on the subordinated debt offering?

Piper Sandler & Co served as the sole placement agent for the private offering, while Fenimore Kay Harrison, LLP provided legal advice.

How does the new subordinated debt impact current shareholders of JD Bancshares?

The new capital raised from the subordinated debt is non-dilutive, meaning it does not reduce the equity stake of current shareholders.