By Mary-Katherine Stinson
Lexington, Ky., Jan. 24 – Eagle Bancorp Montana, Inc. completed a private placement of $40 million 10-year 3.5% fixed-to-floating rate subordinated notes, according to a news release Monday.
The notes will bear interest at an annual rate of 3.5% until Feb. 1, 2027, and thereafter at SOFR plus 218 basis points. The floating interest rate will reset quarterly.
The notes were issued without an original issue discount.
The company may redeem the notes, in whole or in part, at any time after Feb. 1, 2027 at par plus interest.
The notes are intended to qualify as tier 2 capital for regulatory purposes.
The company entered into a registration rights agreement with the purchasers. The interest rate will increase if the company fails to meet its obligations to replace the notes with registered notes under the Securities Act.
Performance Trust Capital Partners, LLC was the placement agent.
Holland & Knight LLP was the company’s legal counsel.
Silver, Freedman,Taff & Tiernan LLP served as the legal counsel for the placement agent.
Proceeds from this placement will be used for general corporate purposes, including, but not limited to, providing capital for the company’s acquisition of First Community Bancorp, Inc. and the redemption of an outstanding $10 million of the company’s 5.75% senior notes due Feb. 15, 2022.
Eagle is a bank holding company based in Helena, Mont.
| Issuer: | Eagle Bancorp Montana, Inc.
|
| Issue: | Subordinated notes
|
| Amount: | $40 million
|
| Maturity: | Feb.1, 2032
|
| Placement agent: | Performance Trust Capital Partners, LLC
|
| Counsel to issuer: | Holland & Knight LLP
|
| Counsel to agent: | Silver, Freedman,Taff & Tiernan LLP
|
| Trustee: | U.S. Bank NA
|
| Coupon: | 3.5% for the first five years, then SOFR plus 218 bps
|
| Price: | Par
|
| Yield: | 3.5%
|
| Call: | Redeemable at par plus interest after Feb. 1, 2027
|
| Settlement date: | Jan. 21
|
| Distribution: | Private placement
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