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AmeriServ Financial Inc. Announces Completion Of $27 Million Private Placement Of Subordinated Notes
JOHNSTOWN, Pa., Aug. 26, 2021 /PRNewswire/ -- AmeriServ Financial, Inc. (NASDAQ: ASRV) is pleased to announce that the Company has completed a private
About this update from Ameriserv Financial Inc.
[{"type":"text","content":"JOHNSTOWN, Pa., Aug. 26, 2021 /PRNewswire/ -- AmeriServ Financial, Inc. (NASDAQ: ASRV) is pleased to announce 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. \nThe 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.\nThe 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.\nJeffrey A. Stopko, President and Chief Executive Officer, stated: \"We are very pleased to announce the successful completion of our subordinated debt offering. The transaction is strategically important to AmeriServ Financial because the ongoing reduction in our debt costs along with the flexibility the additional capital provides to support further loan growth will have a meaningful positive impact on our financial performance. Overall, we expect to see a $1.4 million annual reduction in interest expense beginning in the fourth quarter of 2021 when the interest expense savings from this transaction is combined with the use of core deposits from our recently completed Somerset County branch acquisition to replace higher cost institutional deposits.\" \nGriffin 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. \nAbout AmeriServ Financial Inc.\nAm...