Peoples Financial Services Corp. has just completed a private placement of $85.0 million in aggregate principal amount of 7.75% fixed-to-floating rate subordinated notes due 2035. The proceeds from this placement are intended for general corporate purposes and the redemption of existing subordinated debt.
The notes will initially bear interest at a rate of 7.75% per annum until June 15, 2030, with interest payable semi-annually in arrears beginning December 15, 2025. From June 15, 2030, to the stated maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to three-month term secured overnight financing rate plus 411 basis points, with interest payable quarterly in arrears beginning September 15, 2030.
In connection with the issuance and sale of the notes, the company entered into a registration rights agreement with the purchasers of the notes, pursuant to which the company has agreed to take certain actions to provide for the exchange of the notes for subordinated notes that are registered under the Securities Act of 1933.
The company's CEO, Gerard A. Champi, expressed satisfaction with the successful completion of the offering, citing robust demand and favorable terms. The company's president, Thomas P. Tulaney, emphasized the cost-effectiveness of the capital issuance and its alignment with their disciplined approach to capital management.
The private placement was managed by Performance Trust Capital Partners, LLC, with legal counsel provided by Troutman Pepper Locke LLP and Luse Gorman, PC.
It's worth noting that the notes have not been registered under the Securities Act of 1933 or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Peoples Financial Services Corp. is the bank holding company of Peoples Security Bank and Trust Company, serving its retail and commercial customers through 39 full-service community banking offices located within Pennsylvania, New Jersey, and New York.
This news comes after the company's merger with FNCB Bancorp, Inc., and is reflected in its first-quarter performance numbers. The company has demonstrated strength and continued excellent execution, which has led to the successful completion of this offering. As a result of these announcements, the company's shares have moved 1.96% on the market, and are now trading at a price of $48.49. Check out the company's full 8-K submission here.
