Sturgis Bancorp, Inc. Announces Completion of $25.5 Million Subordinated Notes Offering

Sturgis Bancorp (STBI) completed a private placement of $25.5 million aggregate principal amount of 7.0% fixed-to-floating rate subordinated notes due September 15, 2036.

Rhea-AI Summary

Sturgis Bancorp (STBI) completed a private placement of $25.5 million aggregate principal amount of 7.0% fixed-to-floating rate subordinated notes due September 15, 2036. The notes were sold at 100% of principal to qualified institutional buyers and accredited investors and are intended to qualify as Tier 2 regulatory capital.

The company plans to use net proceeds for general corporate purposes, including repayment of about $17.9 million of existing indebtedness and a downstream capital contribution to Sturgis Bank & Trust. The notes bear 7.0% fixed interest, payable semi-annually to September 15, 2031, then a floating rate of Three-Month Term SOFR plus 286 basis points, payable quarterly, and may be redeemed at par plus accrued interest on any interest payment date from September 15, 2031.

Positive

• $25.5 million subordinated notes issued, intended as Tier 2 capital
• Proceeds earmarked to repay approximately $17.9 million of existing debt
• Notes provide long-term funding through September 15, 2036

Negative

• New subordinated notes carry a 7.0% fixed coupon until 2031
• Notes are unsecured, subordinated and not insured by the FDIC

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

STURGIS, MI / ACCESS Newswire / September 2, 2026 / Sturgis Bancorp, Inc. (OTCQX:STBI) (the "Company"), the holding company of Sturgis Bank & Trust Company (the "Bank"), today announced the completion of an offering (the "Offering") of $25.5 million aggregate principal amount of its 7.0% fixed-to-floating rate subordinated notes due September 15, 2036 (the "Notes") in a private placement to various qualified institutional buyers and accredited investors. The price for the Notes was 100% of the principal amount of the Notes. The Notes are intended to qualify as Tier 2 capital for regulatory purposes. The Company intends to use the net proceeds from the Offering for general corporate purposes, including repayment of approximately $17.9 million of existing indebtedness of the Company and a downstream of capital to the Bank.

Interest on the Notes will accrue at a rate equal to (i) 7.0% per annum from the original issue date to, but excluding, September 15, 2031, payable semi-annually in arrears, and (ii) a floating rate per annum equal to a benchmark rate, which is expected to be the Three-Month Term SOFR (as defined in the Notes), plus a spread of 286 basis points from and including September 15, 2031 until maturity, payable quarterly in arrears. Beginning on September 15, 2031 through maturity, the Notes may be redeemed, at the Company's option, on any scheduled interest payment date. Any redemption will be at a redemption price equal to 100% of the principal amount of Notes being redeemed, plus accrued and unpaid interest.

Brean Capital, LLC served as financial advisor to the Company and acted as the sole placement agent for the Offering, and was represented by Amundsen Davis LLC as legal counsel. Warner Norcross + Judd LLP served as the Company's legal counsel in the Offering.

About Sturgis Bancorp, Inc. and Sturgis Bank & Trust Company

Sturgis Bancorp, Inc. is the holding company for the Bank, and the Bank's subsidiaries: Oakleaf Financial Services, Inc., Ayres-Oak Insurance Services, and Oak Title Services, LLC. The Bank provides a full array of trust, commercial and consumer banking services from banking offices in Sturgis, Bangor, Battle Creek, Bronson, Centreville, Climax, Colon, Marshall, Niles, Portage, South Haven, St. Joseph, Three Rivers and White Pigeon, Michigan. Oakleaf Financial Services offers a complete range of investment and financial-advisory services. Ayres-Oak Insurance Services offers various competitive commercial and consumer insurance products. Oak Title Services offers commercial and consumer title insurance.

The Notes have not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be reoffered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release is for informational purposes only and shall not constitute an offer to sell, or the solicitation of an offer to buy any security, nor shall there be any sale in any jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The indebtedness evidenced by the Notes is not a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency or fund.

Contacts

Jason J. Hyska, Chief Executive Officer
Brian P. Hoggatt, Executive Vice President, Chief Financial Officer
(269) 651-9345

SOURCE: Sturgis Bancorp, Inc.

View the original press release on ACCESS Newswire

FAQ

What did Sturgis Bancorp (STBI) announce about its subordinated notes offering?

Sturgis Bancorp announced completion of a private placement of $25.5 million aggregate principal amount of fixed-to-floating rate subordinated notes due September 15, 2036, sold at 100% of principal to qualified institutional buyers and accredited investors.

What are the interest terms on the new Sturgis Bancorp (STBI) subordinated notes?

The notes pay 7.0% per annum fixed interest from issuance to, but excluding, September 15, 2031, payable semi-annually. Thereafter, they pay a floating rate equal to Three-Month Term SOFR plus 286 basis points, payable quarterly until maturity.

How will Sturgis Bancorp (STBI) use the $25.5 million subordinated notes proceeds?

The company plans to use net proceeds for general corporate purposes, including repayment of approximately $17.9 million of existing indebtedness and a downstream capital contribution to Sturgis Bank & Trust Company, which is expected to qualify as Tier 2 capital.

When can Sturgis Bancorp (STBI) redeem its 2036 subordinated notes?

From September 15, 2031 through maturity, Sturgis Bancorp may redeem the notes, at its option, on any scheduled interest payment date at a price equal to 100% of principal of the notes being redeemed, plus accrued and unpaid interest.

Do the Sturgis Bancorp (STBI) subordinated notes qualify as regulatory capital?

The subordinated notes are intended to qualify as Tier 2 capital for regulatory purposes, supporting the company’s and the bank’s regulatory capital structure, as described in the announcement.

Are the new Sturgis Bancorp (STBI) subordinated notes registered or FDIC insured?

The notes are not registered under the Securities Act or state securities laws and may not be resold without registration or an exemption. The indebtedness is not a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency or fund.

Who advised Sturgis Bancorp (STBI) on the $25.5 million subordinated notes offering?

Brean Capital served as financial advisor and sole placement agent for the offering, with Amundsen Davis as its legal counsel. Warner Norcross + Judd served as legal counsel to Sturgis Bancorp in connection with the transaction.