Southern Michigan Bancorp, Inc. Announces Completion of $30 Million Subordinated Debt Offering
April 16, 2021 at 04:25 pm
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Southern Michigan Bancorp, Inc. announced that it has completed the private placement of $30 million in fixed-to-floating rate subordinated notes due April 16, 2031 (the “Notes”) to certain qualified institutional buyers and accredited investors. Southern intends to use the net proceeds from this placement for retirement of existing debt, support organic growth, and for general corporate purposes. The Notes have been structured to qualify as Tier 2 capital for Southern for regulatory purposes and will bear interest at a fixed rate of 3.75% per annum until April 16, 2026. For the remainder of the term, the subordinated notes, which mature on April 16, 2031, will bear interest at a rate equal to 3-month Secured Overnight Financing Rate (“SOFR”) plus 302 basis points. The subordinated notes are redeemable by the Company at its option, in whole or in part, on or after June 30, 2026, or in whole or in part from time to time under certain other circumstances.
Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust (The Bank). The Bank operates about 18 branches within Branch, Calhoun, Hillsdale, Jackson, Kalamazoo, and St. Joseph counties, providing a range of consumer, business, and wealth management services throughout the region. Its business, which it conducts primarily through the Bank, is concentrated in a single industry segment, commercial banking. The Bank offers a variety of deposit, payment, credit, and other financial services to all types of customers. The Bankâs commercial lending covers categories, such as business, industrial, agricultural, construction, inventory, and real estate. It offers trust and investment services, which include investment management, trustee services, and others. It also owns Southern Michigan Bancorp Capital Trust I, SMB Risk Management, Inc., and 27 Marshall Street, LLC. The Bank wholly owns SMB Financial Services, Inc.