First Bank Announces Completion of $35 Million Subordinated Debt Offering

Rhea-AI Summary

First Bank (NASDAQ: FRBA) has successfully completed a $35 million private placement of fixed-to-floating rate subordinated notes. The notes, maturing on June 30, 2035, feature a 7.125% fixed interest rate for the first five years, followed by a floating rate of three-month SOFR plus 343 basis points. The proceeds will be used to redeem $30 million of existing subordinated notes and for general corporate purposes. The notes qualify as Tier 2 capital and can be redeemed after June 30, 2030. CEO Patrick L. Ryan highlighted that this offering provides lower-cost capital without diluting existing shareholders, while maintaining tax-deductible benefits. Piper Sandler & Co. acted as the sole placement agent for this private offering.

Positive

• Lower interest rate compared to existing subordinated notes, reducing cost of capital
• No shareholder dilution as no additional common stock is being issued
• Tax-deductible nature of the instrument enhances cost-effectiveness
• Strengthens Tier 2 capital position for regulatory purposes

Negative

• Increased total debt obligation from $30M to $35M
• Interest rate may increase after five years due to floating rate structure
• Long-term debt commitment extending to 2035

HAMILTON, N.J., June 18, 2025 (GLOBE NEWSWIRE) -- First Bank (the “Bank”) (NASDAQ: FRBA) today announced the closing of a $35.0 million private placement of fixed-to-floating rate subordinated notes. The Bank plans to use the proceeds to redeem its outstanding $30.0 million of subordinated notes and for general corporate purposes.

The notes have a maturity date of June 30, 2035, and carry a fixed rate of interest 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 discussed the offering: "We are pleased to announce the successful completion of our subordinated debt offering. 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.

About First Bank
First Bank is a New Jersey state-chartered bank with 27 full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset, Trenton, Williamstown, Morristown and Summit, New Jersey, Doylestown, Trevose, Warminster, West Chester, Paoli, Malvern, Coventry, Devon, Lionville, Media, Pennsylvania, and Palm Beach, Florida. With $3.88 billion in assets as of March 31, 2025, First Bank offers a traditional range of deposit and loan products to individuals and businesses mainly throughout the New York City to Philadelphia corridor. First Bank's common stock is listed on the Nasdaq Global Market exchange under the symbol “FRBA”.

This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond First Bank's control and could impede its ability to achieve these goals. These factors include those listed under Item 1A-Risk Factors in our Annual Report on Form 10-K for the period ended December 31, 2024 and our Quarterly Report on Form 10-Q for the period ended March 31 2025, many of which are out of our control. If one or more events related to these or other risks or uncertainties materialize, or if First Bank’s underlying assumptions prove to be incorrect, actual results may differ materially from what First Bank anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements.

Contact
Andrew Hibshman, Chief Financial Officer
(609) 643-0058, andrew.hibshman@firstbanknj.com

FAQ

What is the size and purpose of First Bank's (FRBA) new subordinated debt offering?

First Bank's new subordinated debt offering is $35 million, with proceeds being used to redeem $30 million of existing subordinated notes and for general corporate purposes.

What are the interest rate terms for First Bank's (FRBA) new subordinated notes?

The notes carry a 7.125% fixed rate for the first five years, then switch to a floating rate of three-month SOFR plus 343 basis points.

When can First Bank (FRBA) redeem these subordinated notes?

First Bank can redeem the notes without penalty on or after June 30, 2030.

How does this debt offering benefit First Bank (FRBA) shareholders?

The offering provides capital at a lower interest rate without diluting existing shareholders, while maintaining tax-deductible benefits.

What is the maturity date of First Bank's (FRBA) new subordinated notes?

The subordinated notes have a maturity date of June 30, 2035.