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Financial Institutions (Nasdaq:FISI) announced today the pricing of its public underwritten offering of $40 million of its fixed to floating rate subordinated notes due 2030 (the “Notes”). Due to market demand, the Company increased the aggregate offering amount of the Notes to $40 million from the previously announced amount of $35 million.
The Notes will bear a fixed rate of interest at a rate of 6.00% per year, from and including April 15, 2015 to but excluding April 15, 2025. From and including April 15, 2025 to the maturity date, the interest rate shall be a floating rate equal to the three-month LIBOR determined on the determination date of the applicable interest period plus 3.944%. The Notes were priced at 100% of their face amount.
The offering is expected to close on or about April 14, 2015, subject to the satisfaction or waiver of customary closing conditions.
The Company intends to treat the Notes as Tier 2 regulatory capital. The Company plans to use the net proceeds of the offering for general corporate purposes, including but not limited to, contributing capital to Five Star Bank, its wholly-owned subsidiary, organic growth initiatives, potential acquisitions to expand its banking and other complementary non-banking businesses should accretive opportunities arise and the payment of dividends.
Sterne, Agee & Leach, Inc. is acting as sole book-running manager for the offering and Sandler O’Neill + Partners, L.P. is acting as co-manager for the offering.
Financial Institutions, Inc. provides diversified financial services through its subsidiaries, Five Star Bank and Scott Danahy Naylon. Five Star Bank provides a wide range of consumer and commercial banking services to individuals, municipalities and businesses through a network of over 50 offices throughout Western and Central New York State. Scott Danahy Naylon provides a broad range of insurance services to personal and business clients across 44 states. Financial Institutions, Inc. and its subsidiaries employ over 625 individuals.
