Sturgis Bancorp, Inc., the holding company of Sturgis Bank & Trust Co., today announced the closing of a private placement of $25.5 million in aggregate principal amount of its 7.00% fixed-to-floating rate subordinated notes due 2036.
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. The notes will mature on September 15, 2036.
Sturgis Bancorp, Inc. is the holding company for Sturgis Bank & Trust Co. and its subsidiaries. The bank provides a full array of trust, commercial and consumer banking services from Michigan offices in Sturgis, Bangor, Battle Creek, Bronson, Centreville, Climax, Colon, Marshall, Niles, Portage, South Haven, St. Joseph, Three Rivers and White Pigeon.
Warner Norcross + Judd LLP represented Sturgis Bancorp, Inc. in the offering.
The Warner transaction team included Charlie Goode, Sarah Harper and Early Stephens.
