AmeriServ Financial Inc. Announces Completion of $27 Million Private Placement of Subordinated Notes
August 26, 2021 at 04:00 pm EDT
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AmeriServ Financial, Inc. announced that the Company has completed a private placement of $27 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 have been structured to qualify as Tier 2 capital for regulatory capital purposes. The Notes are unsecured and have a ten-year term maturing September 1, 2031, and will bear interest at a fixed annual rate of 3.75%, payable semi-annually in arrears until September 1, 2026. From and including September 1, 2026, the interest rate will reset quarterly to the then current three-month Secured Overnight Financing Rate (SOFR) plus 3.11%. The Company may redeem the Notes, in whole or in part, on or after September 1, 2026, or at any time in whole upon certain other specified events. The Company intends to use approximately $20 million of the net proceeds to retire its existing subordinated debt and trust preferred securities that have a weighted average cost of 7.73%. This action alone will reduce the Company's interest expense by approximately $500,000 annually. The remainder of the proceeds will be utilized to support the growth of its subsidiaries and other general corporate purposes. Griffin Financial and PNC FIG Advisory acted as joint placement agents for the offering. Stevens & Lee served as legal counsel to AmeriServ Financial and Pillar Aught served as legal counsel for the placement agents.
AmeriServ Financial, Inc. is a bank holding company of AmeriServ Financial Bank (the Bank). The Bank provides a range of services, including retail banking services and lending, depository, and related financial services. Its retail banking services include demand, savings, and time deposits, checking accounts, money market accounts, secured and unsecured consumer loans, mortgage loans, safe deposit boxes, holiday club accounts, and money order. It provides lending, depository, and related financial services to commercial, industrial, financial, and governmental customers, such as commercial real estate mortgage loans (CRE), short and medium-term loans, revolving credit arrangements, lines of credit, inventory and accounts receivable financing, real estate construction loans, business savings accounts, certificates of deposit, wire transfers, night depository, and lock box services. The Bank also operates 18 automated bank teller machines (ATMs) through its 24-hour banking network.