First National Corporation Issues a 5.50% Fixed-To-Floating Rate Subordinated Note Due 2030, with a Principal Amount of $5.0 Million
July 06, 2020 at 11:27 am EDT
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On June 29, 2020, First National Corporation sold and issued a 5.50% fixed-to-floating rate subordinated note due 2030 with a principal amount of $5.0 million to an institutional investor. The Note will initially bear interest at 5.50% per annum, beginning June 29, 2020 to but excluding July 1, 2025, payable semi-annually in arrears. From and including July 1, 2025 to but excluding July 1, 2030, or up to an earlier redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month SOFR plus 510 basis points, payable quarterly in arrears. Beginning on July 1, 2025 through maturity, the Note may be redeemed, at the company’s option, on any scheduled interest payment date. The Note will mature on July 1, 2030. If certain events of default occur, such as the bankruptcy of the company, the principal amount of the Note may become due and immediately payable. The Note will be an unsecured, subordinated obligation of the company and will rank junior in right of payment to the Company’s existing and future senior indebtedness. The Note is not convertible into common stock or preferred stock, and is not callable by the holder. The Note has been structured to qualify as Tier 2 capital under bank regulatory guidelines, and the proceeds from the sale of the Note will be utilized for general corporate purposes, including the potential repayment of the company’s existing subordinated debt (which debt becomes callable in January 2021) and supporting capital levels at First Bank, the Company’s subsidiary bank.
First National Corporation is a bank holding company for First Bank (the Bank), which is a commercial bank. The Bank offers loan, deposit, and wealth management products and services. Its loan products and services include consumer loans, residential mortgages, home equity loans and commercial loans. Deposit products and services include checking accounts, treasury management solutions, savings accounts, money market accounts, certificates of deposit and individual retirement accounts. Wealth management services include estate planning, investment management of assets, trustee under an agreement, trustee under a will, individual retirement accounts and estate settlement. Its customers include small and medium-sized businesses, individuals and others. It operates over 20 branches throughout the Shenandoah Valley, central regions of Virginia, and the Richmond and Roanoke market areas. It also operates a loan production office and two customer service centers in retirement communities.
FIRST NATIONAL CORPORATION 
