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Summit Bank Group, Inc. (OTC Pink: SBKO) announced the successful closure of a private placement totaling $20 million in 3.25% Fixed-to-Floating Rate Subordinated Notes due December 1, 2031. The initial interest rate will be 3.25% until December 1, 2026, after which it will transition to a floating rate linked to Three-Month Term SOFR plus a 217 basis point spread. Proceeds will be used for general corporate purposes and to maintain required regulatory capital, supporting future growth plans.
Positive
Successful closure of a $20 million private placement indicates strong market interest.
Secured a low-cost capital source for balance sheet growth.
Notes will qualify as Tier 2 capital, improving regulatory standing.
Negative
None.
EUGENE, Ore.--(BUSINESS WIRE)--
Summit Bank Group, Inc. (the “Company”) (OTC Pink: SBKO), the parent company of Summit Bank (the “Bank”), today announced the closing of its private placement of $20.0 million aggregate principal amount of its 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 (the “Notes”). The Notes will mature on December 1, 2031, and will initially bear interest at a rate equal to 3.25% per annum from and including the issue date to, but excluding, December 1, 2026, payable semiannually in arrears. Thereafter, the Notes will bear interest at a floating rate per annum equal to Three-Month Term SOFR, plus a spread of 217 basis points, payable quarterly in arrears. The Notes are intended to qualify as Tier 2 capital for regulatory purposes.
“We are very pleased with the excellent result of our sub debt raise,” said Craig Wanichek, President and Chief Executive Officer. “There was strong interest from the market as indicated by the rate that we were able to secure for a non-rated community bank offering. It further validates the consistent earnings power of our bank and the strength of the communities in which we do business. This offering provides us with low cost capital in order to support our balance sheet growth plans.”
The Company intends to use the net proceeds from this offering for general corporate purposes, the maintenance of required regulatory capital at the Bank, and to support the Company’s and Bank’s future growth.
D.A. Davidson & Co. served as the sole placement agent for this offering. Miller Nash LLP served as counsel to the Company. Sheppard, Mullin, Richter & Hampton LLP served as counsel to the placement agent.
With offices in Eugene and Bend, Summit Bank specializes in providing high-level service to professionals and medium-sized businesses and their owners. Summit Bank is quoted on the NASDAQ Over-the-Counter Bulletin Board as SBKO. Summit is the number one community bank lender in Oregon for SBA Financing.
Summit Bank, with offices in Eugene/Springfield, Central Oregon and the Portland Metropolitan area, specializes in providing high-level service to professionals and medium-sized businesses and their owners. Summit was recognized in 2020 as the Top Small Business Administration (SBA) Community Bank Lender in the State of Oregon.
Craig Wanichek, President & Chief Executive Officer 541-684-7500
Source: Summit Bank Group, Inc.
FAQ
What are the details of the private placement by Summit Bank Group (SBKO)?
Summit Bank Group closed a private placement of $20 million in 3.25% Fixed-to-Floating Rate Subordinated Notes due December 1, 2031.
What will the proceeds from the SBKO private placement be used for?
The proceeds will be used for general corporate purposes, maintaining regulatory capital, and supporting future growth.
What is the interest rate structure of the SBKO subordinated notes?
The notes will have an initial interest rate of 3.25% until December 1, 2026, after which it will be a floating rate based on Three-Month Term SOFR plus a 217 basis point spread.
Who acted as placement agent for the SBKO subordinated notes offering?
D.A. Davidson & Co. served as the sole placement agent for the offering.
