Orange County Bancorp, Inc. Announces Completion of $20 Million Private Placement of Subordinated Notes

Rhea-AI Summary

Orange County Bancorp (OTCQX:OCBI) announced the completion of a $20 million private placement of fixed-to-floating rate subordinated notes due 2030. These notes, rated A- by Egan-Jones, bear a fixed interest rate of 4.25% until 2025, after which it will reset to the current three-month SOFR plus 413 basis points. The net proceeds will support organic growth and potential stock repurchases. CEO Michael Gilfeather stated the oversubscribed offering reflects the institution's financial strength and aligns with their strategic plan to expand business banking in Orange County and beyond.

Positive

• Completed a successful $20 million subordinated notes offering.
• Notes received an A- rating from Egan-Jones Ratings Company.
• Oversubscribed offering indicates strong financial strength.
• Net proceeds will support organic growth and potential stock repurchases.

Negative

• None.

MIDDLETOWN, NY / ACCESSWIRE / September 24, 2020 / Orange County Bancorp, Inc. (the "Company" )(OTCQX:OCBI), parent company of Orange Bank & Trust Co. (the "Bank") and Hudson Valley Investment Advisors, Inc. (HVIA), today announced completion of a private placement of $20 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2030 (the "Notes") to certain qualified institutional buyers and accredited institutional investors.

The Notes have a maturity date of September 30, 2030 and bear interest, payable semi-annually, at the rate of 4.25% per annum, until September 30, 2025. Commencing on that date, the interest rate applicable to the outstanding principal amount due will reset quarterly to an interest rate per annum equal to the then current three-month secured overnight financing rate (SOFR) plus 413 basis points, payable quarterly until maturity. The Notes received an A- rating from Egan-Jones Ratings Company.

The Company intends to use the net proceeds for general corporate purposes, including to support organic growth and potential stock repurchases.

"We are pleased to announce the successful completion of our subordinated debt offering on favorable terms. Completion of this offering is consistent with our strategic plan to grow business banking market share in our legacy market of Orange County, New York as well as our exciting newer opportunities in Rockland, Westchester and the Bronx," said Michael Gilfeather, President and Chief Executive Officer at Orange Bank & Trust Company. "The fact the offering was oversubscribed illustrates the financial strength of the institution and this addition of capital gives us the fuel to grow and ability to take advantage of opportunities on behalf of our customers and shareholders, all without diluting ownership of our current shareholders."

Piper Sandler & Co. served as sole placement agent for the offering. Luse Gorman, PC, served as legal counsel to Orange County Bancorp, Inc. and Covington & Burling LLP served as legal counsel to Piper Sandler & Co.

About Orange County Bancorp, Inc.
Orange County Bancorp, Inc. is the parent company of Orange Bank & Trust Company and Hudson Valley Investment Advisors, Inc. Orange Bank & Trust Company is an independent bank that began with the vision of 14 founders over 125 years ago. It has grown through conservative banking practices, ongoing innovation and an unwavering commitment to its community and business clientele to more than $1.5 billion in total assets. In recent years, Orange Bank & Trust Company has added branches in Rockland and Westchester Counties. Hudson Valley Investment Advisors, Inc. is a Registered Investment Advisor in Goshen, NY. It was founded in 1996 and was acquired by the Company in 2012. For more information, visit orangebanktrust.com or hviaonline.com

For further information:
Robert L. Peacock
EVP Chief Financial Officer
rpeacock@orangebanktrust.com
Phone: (845) 341-5005

This press release is for informational purposes only and shall not constitute an offer to sell, or the solicitation of an offer to buy, any security, nor shall there by any sale in any jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The Notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold absent registration or an applicable exemption from the registration requirements. The indebtedness evidenced by the Notes is not a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency or fund. This release contains forward-looking statements that are not historical facts and include statements about management's strategies and expectations about our business. There are risks and uncertainties that may cause our actual results and performance to be materially different from results indicated by these forward-looking statements. Factors that might cause a difference include the extent of the adverse impact of the current global coronavirus outbreak on our customers, prospects and business, as well as the impact of any future pandemics or other natural disasters; economic conditions; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; unanticipated loan losses, inability to close loans in our pipeline, lack of liquidity; varying and unanticipated costs of collection with respect to nonperforming loans; an inability to dispose of real estate owned; changes in interest rates, changes in FDIC assessments, deposit flows, loan demand, and real estate values; changes in relationships with major customers; operational risks, including the risk of fraud by employees, customers or outsiders; competition; changes in accounting principles, policies or guidelines; changes in laws or regulations and in the manner in which the regulators enforce same; new technology and other factors affecting our operations, pricing, products and services.

SOURCE: Orange County Bancorp, Inc.

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FAQ

What is the purpose of Orange County Bancorp's recent $20 million notes offering?

The net proceeds from the $20 million notes offering will be used for general corporate purposes, including supporting organic growth and potential stock repurchases.

When do Orange County Bancorp's subordinated notes mature?

The subordinated notes issued by Orange County Bancorp will mature on September 30, 2030.

What interest rate will Orange County Bancorp's subordinated notes have?

The subordinated notes will initially bear an interest rate of 4.25% per annum until September 30, 2025, after which it will reset to the current three-month SOFR plus 413 basis points.

What is the significance of the notes being oversubscribed for Orange County Bancorp?

The oversubscription of the notes offering indicates the financial strength of Orange County Bancorp and reflects investor confidence in the company's growth strategy.

Who served as the placement agent for the subordinated notes offering?

Piper Sandler & Co. served as the sole placement agent for the subordinated notes offering.