HILTON HEAD ISLAND, S.C., Sept. 9, 2020 /PRNewswire/ -- CoastalSouth Bancshares Inc., ("CoastalSouth" or the "Company"), the holding company for Coastal States Bank ("CSB"), announced that it has completed a private placement of $15 million of 5.95% fixed-to-floating rate subordinated notes due 2030 (the "Notes") to certain qualified institutional buyers and institutional accredited investors (the "Private Placement"). CoastalSouth intends to use the net proceeds from the Private Placement for general corporate purposes, including continued growth and maintenance of bank level regulatory capital ratios.
The Notes have been structured to qualify as Tier 2 capital for regulatory capital purposes. The Notes are unsecured and have a ten-year term, maturing September 15, 2030, and will bear interest at a fixed annual rate of 5.95%, payable semi-annually in arrears, for the first five years of the term. Thereafter, the interest rate will reset quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Financing Rate ("Three-Month SOFR"), plus a spread of 582 basis points, payable quarterly in arrears, provided, however, that, in the event the Three-Month SOFR is less than zero, the Three-Month SOFR shall be deemed to be zero. As provided in the Notes, under specified conditions, the interest rate on the Notes during the Floating Rate Period may be determined based upon a rate other than Three-Month SOFR. The Company may redeem the Notes, in whole or in part, on any interest payment date on or after September 15, 2025, and to redeem the Notes at any time in whole upon certain other specified events.
President and Chief Executive Officer, Stephen R. Stone stated, "Given our growth trajectory and opportunities for continued expansion, this transaction positions us well for the future."
Piper Sandler & Co. served as the sole placement agent. Alston & Bird LLP served as legal counsel to CoastalSouth and Troutman Pepper Hamilton Sanders LLP served as legal counsel to the placement agent.
About the Company
Established in 2003, CoastalSouth Bancshares, Inc. (OTCQX: COSO), a Virginia corporation, is headquartered in Hilton Head Island, South Carolina. As of August 31, 2020 the Company had approximately $1.1 billion in total assets.
CoastalSouth, through its wholly-owned subsidiary, CoastalStates Bank (CSB), builds relationships by providing a full range of banking services designed for businesses, their owners, and individuals looking for a local banking partner. With a community bank presence in the Lowcountry of South Carolina (Hilton Head Island and Bluffton), Savannah, Atlanta, and North Georgia (Cumming and Dawsonville), CSB also serves communities across the country through its Government Guaranteed Lending, Senior Housing, and Mortgage Banker Finance lines of business.