Item 8.01 Other Events
On September 3, 2021, ChoiceOne Financial Services, Inc. (the "Company") entered
into a Subordinated Note Purchase Agreement (the "Note Purchase Agreement")
pursuant to which the Company issued and sold $32.5 million in aggregate
principal amount of its 3.25% Fixed-to-Floating Rate Subordinated Notes due
September 3, 2031 (the "Notes"). The Notes were offered and sold by the Company
in a private placement transaction in reliance on exemptions from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to Section 4(a)(2) of the Securities Act and
Regulation D thereunder. The Company intends to use the net proceeds from the
offering for general corporate purposes, including, without limitation, support
for organic growth, possible redemption of senior indebtedness, common stock
repurchases or support for bank level capital ratios.
From and including the original issue date of the Notes ("Issue Date") to but
excluding September 3, 2026 or the date of earlier redemption, the Company will
pay interest on the Notes semi-annually in arrears on March 1 and September 1 of
each year at a fixed interest rate of 3.25% per annum, computed on the basis of
a 360-day year consisting of twelve 30-day months, beginning on March 1, 2022.
From and including September 3, 2026, to, but excluding, the maturity date or
the date of earlier redemption (the "Floating Rate Period") the Company will pay
interest on the Notes at a floating interest rate. The interest rate during any
Floating Rate Period shall be equal to the benchmark rate, which is expected to
be Three-Month Term SOFR (as defined in the Notes), reset quarterly, plus 255
basis points, computed on the basis of a 360-day year and the actual number of
days elapsed. During the Floating Rate Period, the Company will pay interest on
the Notes quarterly in arrears on March 1, June 1, September 1 and December 1 of
each year, beginning on December 1, 2026. Notwithstanding the foregoing, if the
benchmark rate is less than zero, the benchmark rate shall be deemed to be zero.
The Company may, at its option, redeem the Notes in whole or in part (i) on or
after the fifth anniversary of the Issue Date, and from time to time on each
Interest Payment Date (as defined in the Notes) thereafter, or (ii) at any time
upon the occurrence of a "Tier 2 Capital Event," a "Tax Event," or an
"Investment Company Event" (each as defined in the Notes). The redemption price
for any redemption is 100% of the principal amount of the Notes, plus accrued,
but unpaid interest thereon to, but excluding, the date of redemption. Any
redemption of the Notes will be subject to the receipt of any and all required
federal and state regulatory approvals, including the approval of the Board of
Governors of the Federal Reserve System to the extent then required under
applicable laws or regulations.
The Notes are general unsecured, subordinated obligations of the Company and
rank junior to all of its existing and future Senior Indebtedness (as defined in
the Notes). The Notes are obligations of the Company only and will not be
obligations of, and will not be guaranteed by, any of its subsidiaries.
The foregoing description of the Notes is not complete and is qualified in its
entirety by reference to the complete text of the Notes, forms of which are
attached as Exhibits 4.1 and 4.2 and are incorporated herein by reference.
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Item 9.01 Financial Statements and Exhibits
Exhibits
4.1 Form of 3.25% Fixed-to-Floating Rate Subordinated Note due
September 3, 2031 .
4.2 Form of 3.25% Fixed-to-Floating Rate Global Subordinated Note
due September 3, 2031 .
99.1 Press Release dated September 7, 2021
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