South Atlantic Bancshares, Inc. Announces Private Placement of $30.0 Million of 3.25% Fixed-to-Floating Rate Subordinated Notes

Rhea-AI Summary

South Atlantic Bancshares, Inc. (OTCQX: SABK) announced on December 17, 2021, the issuance of $30 million in fixed-to-floating rate subordinated notes due 2031. The notes, which qualify as Tier 2 capital, carry a fixed interest rate of 3.25% for the initial period until December 2026, after which the rate will adjust quarterly. The company plans to use the proceeds for strategic opportunities and general corporate purposes. This offering received strong support from institutional investors, signaling confidence in the company's growth potential.

Positive

• Issuance of $30 million in subordinated notes to strengthen capital.
• Fixed interest rate of 3.25% initially, providing financial stability.
• Proceeds aimed at strategic growth opportunities and corporate purposes.

Negative

• None.

MYRTLE BEACH, S.C., Dec. 17, 2021 /PRNewswire/ -- South Atlantic Bancshares, Inc. ("South Atlantic" or the "Company") (OTCQX: SABK), parent of South Atlantic Bank (the "Bank"), today announced the issuance of $30.0 million aggregate principal amount of fixed-to-floating rate subordinated notes due 2031 ("Notes") to certain institutional accredited investors and qualified institutional buyers in a private placement.  The Company intends to use the net proceeds from this transaction for potential future strategic opportunities and general corporate purposes.

The Notes are intended to qualify as Tier 2 capital for regulatory capital purposes.  The Notes will initially bear interest at a fixed annual rate of 3.25%, payable quarterly in arrears to, but excluding, December 31, 2026. From and including December 31, 2026, to, but excluding, the maturity date of December 16, 2031 or earlier redemption date, the interest rate will reset quarterly to an interest rate per annum equal to a benchmark rate, which is expected to be the then-current three-month Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York (provided, that in the event the benchmark rate is less than zero, the benchmark rate will be deemed to be zero) plus 212 basis points, payable quarterly in arrears.  South Atlantic is entitled to redeem the Notes, in whole or in part, on any interest payment date on or after December 16, 2026, and to redeem the Notes at any time in whole, but not in part, upon certain other specified events.

K. Wayne Wicker, Chairman and Chief Executive Officer of South Atlantic, stated, "We are very pleased with the results of our subordinated debt offering and appreciate the strong support from the investment community.  We believe this additional capital will provide us with opportunities to strategically grow the Bank and continue to support our customers and communities."

Performance Trust Capital Partners, LLC served as placement agent for this offering.  Hunton Andrews Kurth LLP served as legal counsel to the Company and Fenimore Kay Harrison LLP served as legal counsel to the placement agent.

This press release is for informational purposes only and shall not constitute an offer to sell, a solicitation of an offer to sell, or the solicitation of an offer to buy the Notes, nor shall there be 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 any such jurisdiction.  The Notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from 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.

About South Atlantic Bancshares, Inc.

South Atlantic Bancshares, Inc. (OTCQX: SABK) is a registered bank holding company based in Myrtle Beach, South Carolina with $1.2 billion in total assets.  The Company's banking subsidiary, South Atlantic Bank, is a full-service financial institution spanning the entire coastal area of South Carolina, and is locally owned, controlled and operated.  The Bank operates eleven offices in Myrtle Beach, Carolina Forest, North Myrtle Beach, Murrells Inlet, Pawleys Island, Georgetown, Mount Pleasant, Charleston, Bluffton and Hilton Head Island, South Carolina.  The Bank specializes in providing personalized community banking services to individuals, small businesses and corporations.  Services include a full range of consumer and commercial banking products, including mortgage, and treasury management, including South Atlantic Bank goMobile, the Bank's mobile banking app. The Bank also offers internet banking, no-fee ATM access, checking, certificates of deposit and money market accounts, merchant services, mortgage loans, remote deposit capture, and more.  For more information, visit www.SouthAtlantic.bank.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains, among other things, certain statements about future events that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding the effects of the ongoing COVID-19 pandemic, statements with references to a future period or statements preceded by, followed by, or that include the words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "project," "outlook" or similar terms or expressions.  These statements are based upon the current beliefs and expectations of the Company's management team and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company's control).  These risks, uncertainties and other factors may cause the actual results, performance, and achievements of the Company to be materially different from the anticipated future results, performance or achievements expressed in, or implied by, the forward-looking statements.  Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate.  Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized and readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release.  The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans, or expectations contemplated by the Company will be achieved and readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release.  All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.  Any forward-looking statements contained in this press release are made as of the date hereof, and the Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

Information contained herein, other than information as of December 31, 2020, is unaudited.  All financial data should be read in conjunction with the notes to the consolidated financial statements of the Company and the Bank as of and for the fiscal year ended December 31, 2020, as contained in the Company's 2020 Annual Report located on the Company's website.

Available Information

The Company maintains an Internet web site at www.southatlantic.bank/about-us/investor-relations.  The Company makes available, free of charge, on its web site the Company's annual meeting materials, annual reports, and quarterly earnings reports.  In addition, the OTC Markets Group maintains an Internet site that contains reports, proxy and information statements, and other information regarding the Company (at www.otcmarkets.com/SABK).

The Company routinely posts important information for investors on its web site (under www.southatlantic.bank and, more specifically, under the Investor Relations tab at www.southatlantic.bank/about-us/investor-relations/).  The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under the OTC Markets Group OTCQX Rules for U.S. Banks.  Accordingly, investors should monitor the Company's web site, in addition to following the Company's press releases, OTC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company's web site is not incorporated by reference into, and is not a part of, this press release.

Member FDIC

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SOURCE South Atlantic Bancshares, Inc.

FAQ

What is the purpose of South Atlantic Bancshares' $30 million subordinated notes issuance?

The proceeds will be used for potential future strategic opportunities and general corporate purposes.

What is the interest rate on the subordinated notes issued by South Atlantic Bancshares?

The initial interest rate is 3.25%, which will change to a floating rate after December 31, 2026.

What is the maturity date of the subordinated notes issued by South Atlantic Bancshares?

The notes are due on December 16, 2031.

How does the subordinated notes issuance affect South Atlantic Bancshares' capital?

The notes qualify as Tier 2 capital, enhancing the bank's capital position.

Who was the placement agent for South Atlantic Bancshares' subordinated notes offering?

Performance Trust Capital Partners, LLC served as the placement agent for this offering.