Robust Investor Demand Results in Significantly Oversubscribed Offering
KILMARNOCK, VA / ACCESS Newswire / March 3, 2025 / Chesapeake Financial Shares, Inc. (the "Company"), the parent company of Chesapeake Bank (the "Bank") and Chesapeake Wealth Management, Inc., announced today that the Company has completed a private placement (the "Offering") of $25 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the "Notes").
The Notes have been structured to qualify as Tier 2 capital for the Company under regulatory capital guidelines, and the proceeds may be contributed to the Bank as Tier 1 capital. The Offering size was increased due to significant investor demand at favorable pricing. The proceeds from the sale of the Notes will be utilized for general corporate purposes, which may include pursuit of continued growth opportunities, a partial repositioning of the Bank's investment portfolio, and opportunistic repurchases of common shares.
The Notes will initially bear interest at 8.00% per year, from and including February 28, 2025, to but excluding March 1, 2030, payable semi-annually in arrears. From March 1, 2030, through maturity or early redemption, the interest rate will reset quarterly to an interest rate per year equal to three-month SOFR plus 394 basis points, payable quarterly in arrears. On or after the fifth anniversary of the original issue date through maturity, the Company has the option to redeem the Notes, in whole or in part, on any scheduled interest payment date. The Company may also redeem the Notes in whole at any time following certain specified events. The Notes will mature on March 1, 2035.
Jeffrey M. Szyperski, President and Chief Executive Officer of the Company, stated, "We are pleased to share the news of the successful completion of our subordinated debt offering with such attractive terms. The terms of this debt issuance are favorable to providing the Company with future growth opportunities as well as further strengthening our already strong balance sheet that should translate into long-term shareholder value."
Performance Trust Capital Partners, LLC served as the sole placement agent for the Offering. Williams Mullen served as legal counsel to the Company, and Troutman Pepper Locke LLP served as legal counsel to Performance Trust Capital Partners, LLC.
ABOUT CHESAPEAKE FINANCIAL SHARES, INC.
Chesapeake Financial Shares, Inc. is a one-bank holding company originally chartered in 1900 and based in Kilmarnock, Virginia. Chesapeake Financial Shares, Inc.'s stock is quoted on the OTC Markets Group Inc.'s OTCQX Market under the symbol "CPKF."
The holding company operates two subsidiaries. Chesapeake Bank and Chesapeake Wealth Management, Inc.
Chesapeake Wealth Management, Inc. is an independent wealth management firm offering brokerage, trust, and estate management services.
More detail can be found in the Company's most recent Annual Report, or visit www.chesapeakefinancialshares.com.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements that are subject to risks and uncertainties. You should not place undue reliance on these forward-looking statements because they are subject to numerous risks and uncertainties relating to the Company's consolidated operations and business environment, which are difficult to predict and may be beyond the Company's control. Forward-looking statements include information concerning the Company's and the Bank's future results, performance, operations and business strategy. These statements often include words such as "may," "believe," "expect," "anticipate," "intend," "potential," "opportunity," "could," "project," "seek," "should," "would," "plan," "estimate" or other similar expressions. Forward-looking statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that could cause the Company's actual results to differ materially from the information in the forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, beliefs and expectations, if a change occurs or the Company's, assumptions, beliefs or expectations were incorrect, the Company's business, financial condition, liquidity or results of operations may vary materially from those expressed in such forward-looking statements. New risks and uncertainties arise from time to time, and the Company cannot predict these events or how they may affect the Company. The Company has no duty to, and does not intend to, update or revise the forward-looking statements after the date on which they are made. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this press release or elsewhere might not reflect the Company's actual results.
Contact: Jeffrey M. Szyperski 1-800-434-1181
SOURCE: Chesapeake Financial Shares Inc.
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