Preferred Bank Reports Completion of $150 Million Debt Offering

Rhea-AI Summary

Preferred Bank (Nasdaq: PFBC) announced the successful completion of a public offering, raising $150 million from 3.375% Fixed-to-Floating Rate Subordinated Notes due 2031. The offering price was $150 million, with net proceeds of approximately $147.65 million after fees. The funds will be used to redeem $100 million of existing subordinated debentures and for general corporate purposes, including funding loans. The Bank expects to incur about $614,000 in pre-tax debt extinguishment costs in Q2 2021. Preferred Bank maintains a BBB+ debt rating from Kroll Bond Rating Agency.

Positive

• Successfully raised $150 million through a public offering.
• Net proceeds of approximately $147.65 million will strengthen capital position.
• Used proceeds to redeem $100 million of subordinated debentures, improving debt profile.

Negative

• Expected pre-tax debt extinguishment costs of approximately $614,000.

LOS ANGELES, June 16, 2021 (GLOBE NEWSWIRE) -- Preferred Bank (the “Bank”), (Nasdaq: PFBC), one of the larger independent California banks, announced the completion of a public offering and sale of $150 million in aggregate principal amount of its 3.375% Fixed-to-Floating Rate Subordinated Notes due 2031 (the “Notes”). The aggregate public offering price was $150,000,000 and the aggregate underwriting discounts and commissions were $1,875,000. The Notes were sold at par, resulting in net proceeds, after discounts and estimated offering expenses, of approximately $147,650,000. The Bank has a BBB+ rating of its subordinated debt from the Kroll Bond Rating Agency.

The Bank expects to use the net proceeds from the offering to redeem $100 million of the Bank’s 2016 fixed-to-floating rate subordinated debentures, plus accrued but unpaid interest thereon, and for general corporate purposes, which may include, among other things, funding loans or purchasing investment securities for the Bank’s portfolio. Also, as a result of the redemption of the existing $100 million of subordinated notes, the Bank expects to incur approximately $614,000 in pre-tax debt extinguishment costs in the second quarter of 2021.

Piper Sandler & Co. served as the bookrunner and Raymond James & Associates, Inc., Stephens Inc., and B. Riley Securities, Inc. served as co-managers. Manatt, Phelps & Phillips, LLP represented the Bank and Holland & Knight LLP acted for the initial purchasers.

The Bank has obtained a permit for the sale of the securities from the Commissioner of the California Department of Financial Protection and Innovation. This permit is permissive only and does not constitute a recommendation or endorsement of the securities sold.

This press release is for informational purposes only and shall not constitute an offer to sell, or a solicitation of an offer to buy, the securities, nor shall there be any sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The securities are neither insured nor approved by the Federal Deposit Insurance Corporation.

ABOUT PREFERRED BANK

Preferred Bank is one of the larger independent commercial banks headquartered in California. The Bank is chartered by the State of California, and its deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent permitted by law. The Bank conducts its banking business from its main office in Los Angeles, California, and through eleven full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Pico Rivera, Tarzana and San Francisco (2)) and one branch in Flushing, New York. In addition, the Bank operates a loan production office in the Houston suburb of Sugar Land, Texas. Preferred Bank offers a broad range of deposit and loan products and services to both commercial and consumer customers. The Bank provides personalized deposit services as well as real estate finance, commercial loans and trade finance to small and mid-sized businesses, entrepreneurs, real estate developers, professionals and high net worth individuals. Although originally founded as a Chinese-American Bank, Preferred Bank now derives most of its customers from the diversified mainstream market but does continue to benefit from the significant migration to California of ethnic Chinese from China and other areas of East Asia. For more information about Preferred Bank visit www.preferredbank.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements about the Bank’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimates,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Any forward-looking statements are qualified in their entirety by reference to the factors discussed in the section titled “Risk Factors” in the Bank’s offering circular relating to this offering, including the documents incorporated by reference therein, and other risks described in documents subsequently filed by the Bank from time to time. Further, any forward-looking statement speaks only as of the date on which it is made, and the Bank undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

AT THE COMPANY:	AT FINANCIAL PROFILES:
Edward J. Czajka	Jeffrey Haas
Executive Vice President	General Information
Chief Financial Officer	(310) 622-8240
(213) 891-1188	PFBC@finprofiles.com

FAQ

What is the total amount raised in Preferred Bank's public offering?

Preferred Bank raised a total of $150 million in its public offering.

What will the proceeds from the offering be used for?

The proceeds will be used to redeem $100 million of existing subordinated debentures and for general corporate purposes.

What is the debt rating of Preferred Bank?

Preferred Bank holds a BBB+ rating for its subordinated debt from Kroll Bond Rating Agency.

What costs is Preferred Bank expecting due to the redemption of its subordinated debentures?

Preferred Bank expects to incur approximately $614,000 in pre-tax debt extinguishment costs.

When are the subordinated notes due from Preferred Bank?

The subordinated notes issued by Preferred Bank are due in 2031.