CHERRY HILL, N.J.--(BUSINESS WIRE)--1st Colonial Bancorp, Inc. (OTC Pink: FCOB) (the "Company"), the parent company of 1st Colonial Community Bank ("1st Colonial"), today announced the completion of a private placement of $10.75 million in aggregate principal amount of fixed to floating rate subordinated notes to certain bank and institutional accredited investors. The proceeds from the placement of the subordinated debt will be used to support growth initiatives, as well as general corporate purposes.
Terms of Subordinated Notes
The subordinated notes have a maturity date of September 1, 2030 and bear interest, payable semi-annually, at the rate of 7.00% per annum, until September 1, 2025. Commencing on that date, the interest rate applicable to the outstanding principal amount due will be reset quarterly to an interest rate per annum equal to the then current three-month secured overnight financing rate (SOFR) plus 689 basis points, payable quarterly until maturity. The notes include a right of prepayment, without penalty, on or after September 1, 2025 and, in certain limited circumstances, before that date. The indebtedness evidenced by the subordinated notes, including principal and interest, is unsecured and subordinate and junior in right of payment to general and secured creditors of the Company and to depositors of 1st Colonial. The subordinated notes have been structured to qualify as Tier 2 capital for regulatory purposes.
Piper Sandler & Co. served as placement agent for the private placement of the subordinated notes. Stevens & Lee, P.C. acted as the Company’s counsel and Holland & Knight LLP acted as counsel to Piper Sandler & Co. in connection with the transaction.
Management Commentary
Robert White, President and CEO, stated, “We are pleased to announce the successful completion of our subordinated debt placement, as a form of low-cost regulatory capital. This transaction provides the necessary capital to support the growth outlined in our strategic plan, without any dilution to our shareholder base. We remain committed to increasing shareholder value and executing upon our strategic goals.”
About the Company
1st Colonial Community Bank, the subsidiary of 1st Colonial Bancorp, provides a range of business and consumer financial services, placing emphasis on customer service and access to decision makers. Headquartered in Collingswood, New Jersey, 1st Colonial also has a branch in the New Jersey community of Westville and administrative offices in Cherry Hill, New Jersey. To learn more, call (856) 858-8402 or visit www.1stcolonial.com.
This release contains forward-looking statements that are not historical facts and include statements about management’s strategies and expectations about our business. There are risks and uncertainties that may cause our actual results and performance to be materially different from results indicated by these forward-looking statements. Factors that might cause a difference include the extent of the adverse impact of the current global coronavirus outbreak on our customers, prospects and business, as well as the impact of any future pandemics or other natural disasters; economic conditions; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; unanticipated loan losses, inability to close loans in our pipeline, lack of liquidity; varying and unanticipated costs of collection with respect to nonperforming loans; an inability to dispose of real estate owned; changes in interest rates, changes in FDIC assessments, deposit flows, loan demand, and real estate values; changes in relationships with major customers; operational risks, including the risk of fraud by employees, customers or outsiders; competition; changes in accounting principles, policies or guidelines; changes in laws or regulations and in the manner in which the regulators enforce same; new technology and other factors affecting our operations, pricing, products and services.