Press release
Financial Institutions, Inc. Announces Completion of $35 Million Private Placement of Subordinated Notes
WARSAW, N.Y., Oct. 07, 2020 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (NASDAQ:FISI) (the “Company”), parent company of Five Star Bank (the “Bank”), SDN
About this update from Financial Institutions, Inc.
[{"type":"text","content":"WARSAW, N.Y., Oct. 07, 2020 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (NASDAQ:FISI) (the “Company”), parent company of Five Star Bank (the “Bank”), SDN Insurance Agency, LLC (“SDN”), Courier Capital, LLC (“Courier Capital”) and HNP Capital, LLC (“HNP Capital”), today announced completion of a private placement of $35 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2030 (the “Notes”) to qualified institutional buyers and accredited institutional investors.\n The Notes have a maturity date of October 15, 2030 and bear interest, payable semi-annually, at the rate of 4.375% per annum, until October 15, 2025. Commencing on that date, the interest rate will reset quarterly to an interest rate per annum equal to the then current three-month secured overnight financing rate (“SOFR”) plus 426.5 basis points, payable quarterly until maturity. The Company is entitled to redeem the Notes, in whole or in part, on any interest payment date on or after October 15, 2025, and to redeem the Notes in whole at any time upon certain other specified events. The Notes received a BBB- rating from Kroll Bond Rating Agency. The Company intends to use the net proceeds for general corporate purposes, organic growth and to support regulatory capital ratios at Five Star Bank. 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, as amended (the “Securities Act”), with substantially the same terms as the Notes. “We are pleased with the successful completion of our subordinated debt offering,” said Martin K. Birmingham, President and Chief Executive Officer. “It was well-received by the investment community and completed on favorable terms, demonstrating the financial strength of our Company. The offering provides capital for use in serving our customers, taking advantage of growth opportunities, and strengthening the Bank’s capital ratios. We believe the offering is a cost-effective way to increase capital without diluting our current shareholders.” Piper Sandler & Co. served as sole placement agent for the offering. Harter Secrest & Emery LLP s...