Communities First Financial Corporation Closes Private Placement of Subordinated Notes

Communities First Financial Corporation Closes Private Placement of Subordinated Notes




Communities First Financial Corporation Closes Private Placement of Subordinated Notes

FRESNO, Calif., Nov. 03, 2020 (GLOBE NEWSWIRE) — Communities First Financial Corporation (the “Company”) (OTCQX: CFST), the parent company of Fresno First Bank (the “Bank”), today announced the closing of its private placement of $30.0 million aggregate principal amount of its 4.25% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “2030 Notes”) and $10.0 million aggregate principal amount of its 4.25% Fixed-to-Floating Rate Subordinated Notes due 2035 (the “2035 Notes”). The 2030 Notes will mature on November 15, 2030, and will initially bear interest at a rate equal to 4.25% per annum from and including November 3, 2020 to, but excluding, November 15, 2025, payable semiannually in arrears. Thereafter, the 2030 Notes will bear interest at a floating rate per annum equal to a benchmark rate, which is expected to be Three-Month Term Secured Overnight Financing Rate (“Three-Month Term SOFR”), plus a spread of 407 basis points, payable quarterly in arrears. The 2035 Notes will mature on November 15, 2035, and will initially bear interest at a rate equal to 4.25% per annum from and including November 3, 2020 to, but excluding, November 15, 2030, payable semiannually in arrears. Thereafter, the 2035 Notes will bear interest at a floating rate per annum equal to a benchmark rate, which is expected to be Three-Month Term SOFR, plus a spread of 370 basis points, payable quarterly in arrears. Both the 2030 Notes and the 2035 Notes are intended to qualify as Tier 2 capital for regulatory purposes.

“We are very pleased with the results of our sub debt raise and would like to thank both the D.A. Davidson and Performance Trust teams for their support,” said Steve Miller, President and Chief Executive Officer. “It was encouraging to see the interest from the market and specifically in the rate we were able to secure for a non-rated community bank offering. It speaks to the earnings strength of our franchise. This raise will support our balance sheet growth plans and also further strengthen our payment business platform.”

The Company intends to use the net proceeds from this offering for general corporate purposes, the maintenance of required regulatory capital at the Bank, and to support the Company’s and Bank’s future growth.

D.A. Davidson & Co. and Performance Trust Capital Partners, LLC, acted as joint placement agents for the 2030 Notes. Performance Trust Capital Partners, LLC, acted as sole placement agent for the 2035 Notes. Stuart|Moore|Staub served as counsel to the Company. Manatt, Phelps & Phillips, LLP served as counsel to the placement agents.

Forward Looking Statements

This press release may contain forward-looking statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. The forward-looking statements are based on managements’ expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation, our ability to successfully utilize the funds raised in the sub-debt offering to profitably support our earnings and growth; our borrowers’ actual payment performance as loan deferrals related to the COVID-19 pandemic expire, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance, the Company’s ability to effectively execute its business plans; changes in general economic and financial market conditions; changes in interest rates; changes in the competitive environment; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and assessments; changes in banking regulations or other regulatory or legislative requirements affecting the Company’s business; international developments; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. The Company undertakes no obligation to release publicly the results of any revisions to the forward-looking statements included herein to reflect events or circumstances after today, or to reflect the occurrence of unanticipated events.   The Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Contact: Steve Miller – President & CEO
Steve Canfield – Executive Vice President & CFO
(559) 439-0200