The Victory Bancorp, Inc. Completes Private Placement of $10.0 Million of Subordinated Notes
Victory Bancorp, Inc. (OTCQX: VTYB ), (the “Company”), the holding company for The Victory Bank (the “Bank”), today announced that it has completed the private placement of $10 million in fixed-to-floating rate subordinated notes due June 30, 2030 (the “Notes”) to institutional accredited investors. Victory Bancorp 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 the Company for regulatory purposes and will bear interest at a fixed rate of 6.25% per annum until June 30, 2025. For the remainder of the term, the subordinated notes, which mature on June 30, 2030, will bear interest at a rate equal to 3-month Secured Overnight Financing Rate (“SOFR”) plus 613 basis points. The subordinated notes are redeemable by the Company at its option, in whole or in part, on or after June 30, 2025, or in whole or in part from time to time under certain other circumstances.
Chairman and Chief Executive Officer Joseph W. Major stated: "We are pleased to announce the successful completion of our subordinated debt offering. This debt at the holding company can be moved to the bank as capital and provides a strong base for continued growth without the dilutive impact of issuing new shares of stock. Additionally, the tax-deductible nature of the instrument, combined with a low-interest rate, makes the overall cost of capital quite attractive. The proceeds will allow us to retire our existing subordinated notes at a lower interest rate and provide additional funds for continued growth.”
Janney Montgomery Scott LLC. served as the sole placement agent for the offering. Kilpatrick Townsend & Stockton LLP served as legal counsel to the Company, and Godfrey & Kahn S.C. served as legal counsel to the placement agent.
About The Victory Bancorp, Inc.
The Victory Bancorp, Inc. is the parent company of The Victory Bank, a Pennsylvania state-chartered commercial bank headquartered in Limerick, Pennsylvania. The Victory Bank was established in 2008. Victory provides high-quality banking services to small and mid-sized businesses and professionals through its two offices located in Montgomery and Berks Counties, Pennsylvania.
As of March 31, 2020, The Victory Bank had total assets of $291.2 million, total deposits of $251.6 million, and total equity of $20.1 million. Additional information about Victory Bancorp is available on this website.
This press release contains forward-looking statements about the offering. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and the Bank are engaged.