First Bank Hamilton Corporate headquarters. – First Bank
First Bank, with 16 branches in New Jersey, on Thursday announced the closing of a $35 million private placement of fixed-to-floating rate subordinated notes. The bank plans to use the proceeds to redeem its outstanding $30 million of subordinated notes and for general corporate purposes.
The notes have a maturity date of June 30, 2035, and carry a fixed interest rate of 7.125% for the first five years. Thereafter, the notes will pay interest at a floating rate, reset quarterly, equal to the then current three-month Secured Overnight Financing Rate (“SOFR”) plus 343 basis points. The notes may be redeemed at the option of the bank, without penalty, on or after June 30, 2030. The notes have been structured to qualify as Tier 2 capital for regulatory purposes.
President and Chief Executive Officer Patrick L. Ryan said, “This new capital will allow us to retire our existing subordinated notes at a lower interest rate and enhance our capital base to support our continued growth without the dilutive impact of issuing additional shares of common stock. Furthermore, the tax-deductible nature of the instrument, combined with low interest rate, makes the overall cost of capital quite attractive.”
Piper Sandler & Co. served as sole placement agent for the private offering. First Bank was advised by Luse Gorman, PC and Piper Sandler & Co. was advised by Silver, Freedman, Taff & Tiernan LLP.
First Bank’s New Jersey branches are in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset, Trenton, Williamstown, Morristown, and Summit.
