Southern Michigan Bancorp, Inc. Announces Completion of $30 Million Subordinated Debt Offering
Southern Michigan Bancorp (SOMC) has successfully completed a private placement of $30 million in subordinated notes, due April 16, 2031. These notes will bear a fixed interest rate of 3.75% until 2026, transitioning to a floating rate thereafter. The proceeds will be utilized for debt retirement, organic growth, and corporate purposes. This financial move aims to enhance the company's Tier 2 capital while maintaining a low-cost capital structure without diluting existing shares. The transaction was facilitated by Performance Trust Capital Partners.
- Successful completion of $30 million subordinated notes offering.
- Proceeds aimed at debt retirement and supporting organic growth.
- Fixed interest rate of 3.75% until 2026 provides predictable financing costs.
- Notes qualify as Tier 2 capital, strengthening balance sheet.
- None.
COLDWATER, Mich., April 16, 2021 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC ) (“Southern”), the holding company for Southern Michigan Bank & Trust (the “Bank”), today announced that it has completed the private placement of
The Notes have been structured to qualify as Tier 2 capital for Southern for regulatory purposes and will bear interest at a fixed rate of
Chairman and Chief Executive Officer John H. Castle stated, "We are extremely pleased to announce the successful completion of this transaction. The tax-deductible nature of the instrument, combined with a low-interest rate and without the dilutive impact of issuing new shares of stock, makes the overall cost of capital quite attractive. The proceeds will allow us to retire existing debt and provide additional funds for continued growth.”
Performance Trust Capital Partners, LLC served as the sole placement agent for the offering. Warner Norcross & Judd LLP served as legal counsel to the Company, and Hunton Andrews Kurth LLP served as legal counsel to the placement agent.
About Southern Michigan Bancorp, Inc.
Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 13 branches within Branch, Calhoun, Hillsdale, Kalamazoo, and St. Joseph Counties, providing a broad range of consumer, business and wealth management services throughout the region.
As of December 31, 2020, Southern had total assets of
Forward-Looking Statements
This press release contains forward-looking statements about the offering. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include the continuing COVID-19 pandemic, increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which Southern and the Bank are engaged.
CONTACT: John H. Castle, CEO
(517) 279-5500
FAQ
What is the purpose of Southern Michigan Bancorp's $30 million subordinated notes offering?
What is the interest rate of the subordinated notes issued by SOMC?
Who acted as the placement agent for Southern Michigan Bancorp's subordinated notes?
When do the subordinated notes issued by SOMC mature?
What financial impact does the issuance of subordinated notes have on SOMC?
