Farmers & Merchants Bancorp, Inc., the parent company of The Farmers & Merchants State Bank, on August 2, 2021, announced its completion of a private placement of $35 million aggregate principal amount of its 3.25% fixed-to-floating rate subordinated notes due July 30, 2031, to various accredited investors.
Farmers & Merchants Bancorp, Inc. intends to use the net proceeds from the offering for general corporate purposes, including financing acquisitions and organic growth.
The price for the subordinated notes was 100% of the principal amount of the notes, and are intended to qualify for Tier 2 capital for regulatory purposes. The notes will accrue at a rate equal to:
- 3.25% per annum from the original issue date to, but excluding, the five-year anniversary, payable semi-annually in arrears.
- 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 263 basis points from and including the five-year anniversary until maturity, payable quarterly in arrears.
Beginning on or after the fifth anniversary of the issue date through maturity, the notes may be redeemed, at Farmers & Merchants Bancorp, Inc.’s option, on any scheduled interest payment date. 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.
Farmers & Merchants State Bank is a local independent community bank that provides commercial banking, retail banking and other financial services across Fulton, Defiance, Hancock, Henry, Lucas, Williams and Wood counties in Northwest Ohio and in Adams, Allen, DeKalb, Jay and Steuben counties in Northeast Indiana.
Warner Norcross + Judd LLP represented Boenning & Scattergood, Inc. in the offering, which served as financial advisor and sole placement agent for the offering.
The Warner transaction team was led by Jeffrey Ott and Charlie Goode, and included Sarah Harper and Malaina Weldy.
Warner’s Banking Law Practice Group
As part of one of the largest and most successful law firms in Michigan, the attorneys in Warner’s Banking Law Practice Group counsel banks and bank holding companies to develop capital raising strategies and to execute public offerings and private placements of securities. Our attorneys practice all aspects of banking law, including bank formations, mergers and acquisitions, strategic transactions, commercial lending, consumer credit, negotiable instruments, bank litigation, workouts and bankruptcy, leveraged leasing, antitrust and regulatory compliance.
