Union Bankshares Announces Completion of $16.5 Million Private Placement of Subordinated Notes

Rhea-AI Summary

Union Bankshares, Inc. (NASDAQ - UNB) has successfully completed a private placement of $16.5 million in fixed-to-floating rate subordinated notes due 2031. The notes will carry an initial interest rate of 3.25%, resetting to the Three-Month Term SOFR plus 263 basis points from September 2026. Proceeds will bolster the capital support for its subsidiary, Union Bank, enhancing growth and general corporate purposes. CEO David Silverman expressed satisfaction with the favorable pricing of the issuance, executed with the assistance of PNC FIG Advisory.

Positive

• Raised $16.5 million through subordinated notes issuance.
• Initial interest rate set at 3.25%, offering investors steady returns.
• Proceeds allocated to support growth and strengthen capital for Union Bank.

Negative

• None.

MORRISVILLE, Vt., Aug. 26, 2021 (GLOBE NEWSWIRE) -- Union Bankshares, Inc. (NASDAQ - UNB) is pleased to announce that the Company has completed a private placement of $16.5 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2031 (the “Notes”) to certain qualified institutional buyers and accredited investors.

The Notes will initially bear interest at 3.25% per year, payable semi-annually in arrears. Beginning September 1, 2026 through the maturity date or earlier redemption, the interest rate will reset quarterly based on the then current Three-Month Term SOFR plus 263 basis points, payable quarterly in arrears. Also beginning on September 1, 2026 through maturity, the Notes may be redeemed in whole or in part, at the Company’s option. The Notes will mature on September 1, 2031.

The Notes are structured to qualify as Tier 2 capital instruments for regulatory capital purposes. The Company intends to utilize the proceeds from the sale of the Notes to provide additional capital support to the Company’s wholly-owned subsidiary, Union Bank, to support growth and for other general corporate purposes.

Union Bankshares, Inc. CEO David Silverman stated, “We are very pleased to have successfully completed this subordinated debt issuance at favorable pricing.” PNC FIG Advisory served as sole placement agent. Primmer Piper Eggleston & Cramer PC served as legal counsel to the Company and Pillar+Aught served as legal counsel for the placement agent.

Union Bankshares, Inc., headquartered in Morrisville, Vermont, is the bank holding company parent of Union Bank, which provides commercial, retail, and municipal banking services, as well as, asset management services throughout northern Vermont and New Hampshire. Union Bank operates 17 banking offices, three loan centers, and multiple ATMs throughout its geographical footprint.

Forward-Looking Statements

Statements made in this press release that are not historical facts are forward-looking statements. Investors are cautioned that all forward-looking statements necessarily involve risks and uncertainties, and many factors could cause actual results and events to differ materially from those contemplated in the forward-looking statements. When we use any of the words “believes,” “expects,” “anticipates” or similar expressions, we are making forward-looking statements. The following factors, among others, could cause actual results and events to differ from those contemplated in the forward-looking statements: uncertainties associated with general economic conditions; changes in the interest rate environment; inflation; political, legislative or regulatory developments; acts of war or terrorism; the markets' acceptance of and demand for the Company's products and services; technological changes, including the impact of the internet on the Company's business and on the financial services market place generally; the impact of competitive products and pricing; and dependence on third party suppliers. For further information, please refer to the Company's reports filed with the Securities and Exchange Commission at www.sec.gov or on our investor page at www.ublocal.com.

Contact: David S. Silverman
(802) 888-6600

FAQ

What is the significance of the $16.5 million private placement by UNB?

The private placement of $16.5 million in subordinated notes enhances Union Bankshares' capital position, supporting growth and operations.

What is the interest rate on the subordinated notes issued by Union Bankshares?

The subordinated notes initially bear an interest rate of 3.25% per year.

When will the interest rate on UNB's subordinated notes reset?

The interest rate will reset quarterly starting September 1, 2026.

How will Union Bankshares use the proceeds from the subordinated notes?

The proceeds will provide additional capital support to Union Bank, aiding growth and general corporate purposes.

What is the maturity date for the subordinated notes issued by UNB?

The subordinated notes will mature on September 1, 2031.