Tectonic Financial, Inc. Completes $40 Million Subordinated Debt Offering

Rhea-AI Summary

Tectonic Financial (Nasdaq: TECTP) completed a private placement of $40 million of 7.25% Fixed-to-Floating Rate Subordinated Notes due 2036 on February 12, 2026. The Notes qualify as Tier 2 capital, bear 7.25% fixed interest until February 15, 2031, then reset quarterly to 3-month SOFR + 368 bps until maturity on February 15, 2036.

Proceeds are intended for general corporate purposes, including redemption of existing T Bancshares indebtedness and redemption of 9.00% Series B perpetual preferred stock. The offering was a private placement to qualified institutional buyers and is unregistered; the notes are not FDIC insured.

Positive

• Raises $40 million of subordinated capital
• Notes intended to qualify as Tier 2 capital
• Proceeds to redeem 9.00% perpetual preferred stock

Negative

• Initial fixed rate of 7.25% is relatively high
• Post-2031 interest resets to SOFR + 368 bps
• Notes are unsecured, subordinated and not FDIC insured

Key Figures

Subordinated notes size: $40 million Coupon (fixed period): 7.25% Maturity: February 15, 2036 +3 more

6 metrics

Subordinated notes size $40 million Private placement subordinated debt offering

Coupon (fixed period) 7.25% Fixed rate on subordinated notes until Feb 15, 2031

Maturity February 15, 2036 Final maturity date of subordinated notes

Floating spread SOFR + 368 basis points Reset margin after Feb 15, 2031

Redemption start date February 15, 2031 First optional redemption date for notes

Redemption price 100% of principal Optional redemption plus accrued and unpaid interest

Market Reality Check

Price: $9.99 Vol: Volume 23,975 is above th...

high vol

$9.99 Last Close

Volume Volume 23,975 is above the 20-day average of 15,282, indicating elevated interest ahead of this announcement. high

Technical Shares at $9.99 are trading below the 200-day MA of $10.68 and about 17.3% under the 52-week high.

Peers on Argus

Regional bank peers showed mixed moves: TCBS up 2.91%, OPHC up 1.35%, while ASRV...

Regional bank peers showed mixed moves: TCBS up 2.91%, OPHC up 1.35%, while ASRV and BAFN fell modestly. With TECTP nearly flat at -0.1% and no peers in the momentum scanner, trading appeared stock-specific rather than sector-driven.

Historical Context

1 past event · Latest: Jan 15 (Neutral)

Pattern 1 events

Date	Event	Sentiment	Move	Catalyst
Jan 15	Preferred redemption plan	Neutral	+0.1%	Announced redemption, delisting, and deregistration of 9.00% Series B preferred.

Pattern Detected

Limited history shows a small positive reaction to a prior capital-structure and listing-status announcement.

Recent Company History

On Jan 15, 2026, Tectonic Financial announced a plan to redeem all 1,725,000 outstanding shares of its 9.00% Series B preferred stock at $10.00 per share, totaling a $17.25 million liquidation preference, alongside plans to delist the preferred shares and deregister with the SEC. That news produced only a modest 0.15% price gain. Today’s subordinated debt issuance for redemptions and general purposes continues this balance sheet and capital structure repositioning theme.

Market Pulse Summary

This announcement details a $40 million private placement of 7.25% fixed‑to‑floating subordinated no...

Analysis

This announcement details a $40 million private placement of 7.25% fixed‑to‑floating subordinated notes due 2036, intended to qualify as Tier 2 capital and support redemptions of existing indebtedness and 9.00% preferred stock. It extends the capital-structure changes disclosed in January around preferred redemption and delisting. Investors may watch how this affects regulatory capital ratios, interest expense under the SOFR plus 368 basis‑point reset, and the timing of planned redemptions.

Key Terms

subordinated notes, private placement, tier 2 capital, secured overnight financing rate ("sofr"), +3 more

7 terms

subordinated notes financial

"completion of its private placement of $40 million in aggregate principal amount of 7.25% Fixed-to-Floating Rate Subordinated Notes"

Subordinated notes are loans companies issue that rank below other debts for repayment, meaning holders get paid only after higher-priority creditors if the issuer runs into trouble. Because they act like being farther back in line at a buffet, they usually offer higher interest to compensate for greater risk, so investors watch them for potential higher returns but also increased chance of loss and sensitivity to the issuer’s financial health.

private placement financial

"announced the completion of its private placement of $40 million in aggregate principal amount"

A private placement is a way for companies to raise money by selling securities directly to a small group of investors instead of through a public offering. This process is often quicker and less regulated, making it similar to offering a special, exclusive investment opportunity to select individuals or institutions. For investors, it can provide access to unique investment options that are not available on public markets.

tier 2 capital regulatory

"The Notes are intended to qualify as Tier 2 capital for the Company for regulatory capital purposes."

Tier 2 capital is the secondary cushion a bank holds to absorb losses after its core capital is used, made up of items like long-term subordinated debt and certain reserves. Think of it as a backup battery that kicks in only after the main battery fails; it matters to investors because its size and quality affect a bank’s regulatory strength, creditworthiness, and the safety of dividends and bond payments under stress.

secured overnight financing rate ("sofr") financial

"floating rate equal to the Three-Month Term Secured Overnight Financing Rate ("SOFR") plus 368 basis points."

A secured overnight financing rate (SOFR) is a daily benchmark interest rate that reflects the actual cost of borrowing cash overnight using U.S. Treasury securities as collateral. Investors watch SOFR because it serves as a reference for loans, bond yields and interest-rate contracts; think of it as the going overnight price to rent money—small changes in that price influence borrowing costs, investment returns and the valuation of interest-sensitive assets.

basis points financial

"floating rate equal to the Three-Month Term Secured Overnight Financing Rate ("SOFR") plus 368 basis points."

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

qualified institutional buyers financial

"the Notes ... to certain qualified institutional buyers and institutional accredited investors."

Qualified institutional buyers are large organizations, like big investment firms or banks, that are allowed to buy certain types of investment opportunities not available to everyday investors. Their size and experience matter because it ensures they understand and can handle complex financial deals, making markets more efficient and secure.

institutional accredited investors financial

"aggregate principal amount ... to certain qualified institutional buyers and institutional accredited investors."

Large financial organizations—such as banks, pension funds, insurance companies, endowments and asset managers—that meet regulatory criteria based on size or experience to buy private, complex, or otherwise restricted securities. They matter to investors because their participation brings big pools of capital, often affects pricing and liquidity, and signals confidence or concern in an offering the way a well-known backer can sway public opinion about a new product.

AI-generated analysis. Not financial advice.

DALLAS, TX / ACCESS Newswire / February 12, 2026 / Tectonic Financial, Inc. ("Tectonic Financial" or the "Company") (Nasdaq:TECTP), a diversified banking and financial services holding company, today announced the completion of its private placement of $40 million in aggregate principal amount of 7.25% Fixed-to-Floating Rate Subordinated Notes due 2036 (the "Notes") to certain qualified institutional buyers and institutional accredited investors. The Company intends to utilize the net proceeds for general corporate purposes, including the redemption of existing indebtedness of T Bancshares, Inc. and the redemption of its 9.00% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock.

The Notes are intended to qualify as Tier 2 capital for the Company for regulatory capital purposes. The Notes initially bear a fixed interest rate of 7.25% until February 15, 2031, after which time and until maturity on February 15, 2036, the interest rate will reset quarterly to an annual floating rate equal to the Three-Month Term Secured Overnight Financing Rate ("SOFR") plus 368 basis points. The Notes are redeemable by the Company at its option, in whole or in part, on or after February 15, 2031. Any redemption will be at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest.

Performance Trust Capital Partners, LLC served as sole placement agent for the offering. Hunton Andrews Kurth LLP served as legal counsel to the Company, and Bradley Arant Boult Cummings LLP served as legal counsel to the placement agent.

The offer and sale of the Notes have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be offered 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 unsecured Notes is not a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency or fund.

###

About Tectonic Financial, Inc.
Tectonic Financial, Inc. is a diversified banking and financial services holding company serving high net worth individuals, small businesses, and institutions across the United States. Through its subsidiaries T Bank, N.A., Tectonic Capital Advisors, LLC, Sanders Morris LLC, HWG Insurance Agency LLC, The Nolan Company (a division of T Bank, N.A.), and Integra Funding Solutions (a division of T Bank, N.A.), Tectonic Financial provides commercial banking; trust and fiduciary services; wealth management and investment advisory; retirement plan services (defined contribution and benefit plan design, recordkeeping, and third-party administration); securities brokerage and underwriting; insurance; and factoring. Tectonic Financial currently has $1 billion in banking assets at T Bank, N.A. and approximately $6 billion in client investment, brokerage and fiduciary assets. Dedicated to delivering exceptional customer experiences, Tectonic Financial combines high-tech solutions with a personal touch, providing strong returns on equity and assets. The Company's non-cumulative perpetual preferred stock is publicly traded on The NASDAQ Stock Market LLC under the symbol "TECTP." For more information, visit tectonicfinancial.com.

Forward Looking Statements
This press release contains, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding certain of the Company's goals and expectations with respect to future events that are subject to various risks and uncertainties, and statements preceded by, followed by, or that include the words "may," "will," "could," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursuant," "target," "continue," and similar expressions. These forward-looking statements are based upon the current belief and expectations of the Company's management team and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company's control).

Such risks and uncertainties include, but are not limited to, those discussed in the Company's Form 10-K for the year ended December 31, 2024, Form 10-Q for the quarter ended March 31, 2025, Form 10-Q for the quarter ended June 30, 2025, Form 10-Q for the quarter ended September 30, 2025, and other documents filed by the Company with the Securities and Exchange Commission from time to time.

These forward-looking statements are based on current information and/or management's good faith belief as to future events. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans or expectations contemplated by the Company will be achieved. The forward-looking statements are made as of the date of this press release. The Company disclaims any duty to revise or update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company for any reason, except as specifically required by law. All forward-looking statements, express or implied, herein are qualified in their entirety by this cautionary statement.

Contact
A. Haag Sherman
Chief Executive Officer, Tectonic Financial, Inc.
713.250.4210

SOURCE: Tectonic Financial, Inc.

View the original press release on ACCESS Newswire

FAQ

What did TECTP announce on February 12, 2026 about new subordinated notes?

Tectonic Financial completed a private placement of $40 million of subordinated notes due 2036. According to the company, the notes carry 7.25% fixed interest until February 15, 2031, then reset quarterly to Three-Month SOFR plus 368 basis points.

How will the TECTP proceeds be used after the $40 million offering?

Proceeds will be used for general corporate purposes and redemptions. According to the company, uses include redeeming existing T Bancshares indebtedness and its 9.00% Series B perpetual preferred stock.

Do the new TECTP notes qualify as regulatory capital and what tier?

Yes, the notes are intended to qualify as Tier 2 capital for regulatory purposes. According to the company, the instrument was structured as subordinated notes to meet Tier 2 capital characteristics.

What are the key interest and maturity terms for TECTP's subordinated notes?

The notes bear 7.25% fixed interest until February 15, 2031, then float until 2036. According to the company, after 2031 the rate resets quarterly to Three-Month SOFR plus 368 basis points, maturing February 15, 2036.

Can TECTP redeem the subordinated notes early and on what terms?

Yes, the company may redeem the notes in whole or part on or after February 15, 2031 at 100% principal. According to the company, any redemption includes accrued and unpaid interest up to the redemption date.

Were TECTP's subordinated notes registered and are they FDIC insured?

No, the offering was a private placement and the notes are not registered under the Securities Act. According to the company, the indebtedness is not a deposit and is not insured by the FDIC or any government agency.