York Traditions Bank announced it will start a capital-raising stock sale through issuance of subordinated debt.
The bank first announced the March 27 completion of a $5 million aggregate principal amount of subordinated notes that were due in March 2025 with a 6.25 percent interest rate. The interest-bearing notes represented a private placement with accredited institutional investors.
The notes include right-of-repayment on or after March 27, 2020, and they qualify as Tier 2 capital.
York Traditions also announced that on March 31 it paid back more than $5.1 million of preferred stock issued in 2011 as part of the U.S. Treasury’s Small Business Lending Fund.
York Traditions CEO Michael Kochenour said the Federal Deposit Insurance Corp. gave approval for the bank to pay off the fund without having to raise extra capital.
“However, we concluded that it was the right time to raise capital through issuance of subordinated debt,” he said. “This Tier 2 capital keeps us in a position to continue to grow organically without issuing capital that would dilute our common shareholders.”
York Township-based York Traditions has more than $300 million in assets and five branches, all in York County.