Eagle Financial Services, Inc. (the “Company”), the holding company for Bank of Clarke County (the “Bank”), announced the completion of a private placement offering of 4.50% Fixed-to-Floating Rate Subordinated Notes due 2032 (the “Notes”), in the aggregate principal amount of $30.0 million, to certain qualified institutional buyers and accredited institutional investors. The Company intends to use the net issuance proceeds for general corporate purposes, including a capital contribution to the Bank to support its continued organic growth. The Notes are intended to qualify as Tier 2 capital for the Company for regulatory capital purposes.
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The Notes mature on April 1, 2032, unless redeemed earlier. The Notes initially bear interest, payable semi-annually in arrears, at a fixed rate of 4.50% per annum until April 1, 2027. Beginning April 1, 2027, and until maturity or redemption, the interest rate applicable to the outstanding principal amount of the Notes due will reset quarterly to an interest rate per annum equal to the then current three-month secured overnight financing rate (SOFR) plus 235 basis points, payable quarterly in arrears. The Company has the option to redeem the Notes, at par and in whole or in part, on any scheduled interest payment date beginning on April 1, 2027.
Luse Gorman, PC served as legal counsel to the Company. Piper Sandler & Co. served as placement agent. Kilpatrick Townsend & Stockton LLP served as legal counsel to Piper Sandler & Co.
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The Notes have not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release is for informational purposes only and shall not constitute an offer to sell, or the solicitation of an offer to buy any security, nor shall there be any sale in any jurisdiction in which such an offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of such jurisdiction. The indebtedness evidenced by the Notes is not a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency or fund.
The Bank of Clarke County offers a broad range of commercial banking, retail banking and trust and investment services through 12 bank branches, two loan production offices, one wealth management office and one drive-through only facility located throughout Clarke, Frederick, Fauquier and Fairfax Counties, as well as the City of Winchester, Towns of Purcellville and Leesburg and Ashburn, VA. One of the Bank’s loan production offices is located in Frederick, Maryland. The Company’s common stock trades on the OTC Markets Group’s OTCQX Market under the symbol EFSI.
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