RESTON, Va.–(BUSINESS WIRE)–WashingtonFirst Bankshares, Inc. (the “Company”) (NASDAQ: WFBI) today announced that it has paid off the remaining $8.9 million of preferred stock issued in connection with the Company’s participation in the Small Business Lending Fund (“SBLF”). The dividend rate on the SBLF preferred stock, which had remained constant at 1% since the preferred stock was issued in 2011, was scheduled to increase to 9% in February of 2016.
The Company paid off the outstanding SBLF with a portion of the proceeds of a private placement, completed on Monday, October 5, 2015, of $25 million of ten-year subordinated notes (the “Notes”) to institutional investors. The Notes will qualify as Tier 2 capital, and will bear interest at a fixed rate of 6.00% for the first five years, and thereafter will bear a floating interest rate. More detail about the terms and conditions of the Notes may be found in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission today. Keefe, Bruyette & Woods, Inc., A Stifel Company, and Sandler O’Neill + Partners, L.P. served as placement agents for the Notes.
The Company also announced that the remaining net proceeds from the sale of the Notes have been injected into its subsidiary, WashingtonFirst Bank (the “Bank”) as equity capital, and that the Bank has used a portion of such capital to redeem $2.5 million of its outstanding 8.00% subordinated notes maturing in 2021. The Company’s total consolidated risk-based capital will increase by approximately $13.1 million due to the net effect of the transactions described in this release.