Tectonic prices; preferred stocks mostly better; Farmer Mac slips; U.S. Bancorp, UMH up

By Cristal Cody

Tupelo, Miss., May 10 – Tectonic Financial Inc. tapped the preferred stock market on Friday with a $15 million offering of non-cumulative fixed-to-floating rate preferred shares.

Preferred stocks were mixed at the start of Friday’s session but closed the day stronger.

The Wells Fargo Hybrid and Preferred Securities index headed out up 0.15%.

The U.S. iShares Preferred Stock ETF rose 8 cents, or 0.22%, to $36.44.

In the secondary market on Friday, Federal Agricultural Mortgage Corp.’s $100 million of $25-par series D 5.7% non-cumulative perpetual preferred stock that priced on Wednesday closed off 5 cents, or 0.2%, at $24.85. The preferreds were up 6 cents in early pink slip trading over the morning.

The preferreds trade over-the-counter under the symbol “FMTPP.”

In other trading on Friday, U.S. Bancorp’s 6.5% series F fixed-to-floating rate non-cumulative perpetual preferred stock (NYSE: USBPrM) continued to improve on Friday and gained 4 cents, or 0.15%, to $26.88 with about 188,000 shares traded. The shares were flat at the start of the day.

Meanwhile, UMH Properties, Inc.’s 6.75% series C cumulative redeemable preferred stock (NYSE: UMHPrC) recovered over the day to gain 9 cents, or 0.36%, to $25.09 on about 45,000 shares traded.

Tectonic taps market

Tectonic Financial priced $15 million of 9% non-cumulative fixed-to-floating rate preferred shares on Friday, according to an FWP filed with the Securities and Exchange Commission.

The company sold 1.5 million shares in the offering with a $10.00 liquidation preference.

The deal includes an over-allotment option of $2.25 million, or 225,000 preferred shares.

The fixed rate will reset May 15, 2024 to a floating rate of Libor plus 672 basis points.

Sandler O’Neill & Partners, LP was the left bookrunner. Sanders Morris Harris LLC was a joint bookrunner.

The company plans to apply to list the preferreds on the Nasdaq under the symbol “TECTP.”

Tectonic Financial is a Houston-based investment and risk management firm.

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