First National Corporation announces plan to redeem preferred stock
First National Corporation, the parent company of First Bank, announced its plan to redeem all 13,900 shares of Series A preferred stock at par for $13.9 million and all 695 shares of Series B preferred stock at par for $695 thousand on December 2, 2015 . The Series A and Series B preferred stock both have a 9.00% dividend rate.
The company plans to fund the Redemption with existing cash and $5 million of proceeds received by the Company from the private placement of subordinated notes issued on October 30, 2015 (the “Issuance”). The subordinated notes have a fixed interest rate of 6.75% for ten years with a maturity date of October 1, 2025. The notes may be repaid in full by the Company on or after October 1, 2020.
The company expects a favorable impact to net income available to common shareholders of $1.1 million on an annual basis and capital ratios to exceed its target levels following the Issuance and Redemption