Financial Institutions to sell $35 million $1,000-par fixed-to-floating rate subordinated notes

By Stephanie N. Rotondo

Phoenix, April 9 – Financial Institutions Inc. plans to price $35 million of $1,000-par fixed-to-floating rate subordinated notes due 2030, according to a prospectus filed with the Securities and Exchange Commission on Thursday.

Sterne Agee & Leach Inc. is the bookrunner. Sandler O’Neill + Partners LP is the co-manager.

The interest rate will be fixed until 2025, at which time it will begin floating at Libor plus a spread. While fixed, interest will be payable semiannually and then quarterly once floating.

The company can redeem the notes beginning in 2025 at par plus accrued interest. The company can also redeem the debt upon a tax event, regulatory capital change or if the company has to register as an investment company.

The notes will not be listed on any exchange.

Proceeds will be used for general corporate purposes, including contributing capital to the bank, supporting organic growth, possible acquisitions and the payments of dividends.

Financial Institutions is a Warsaw, N.Y.-based holding company for Five Star Bank.

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