Issuer:
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Tectonic Financial, Inc., a Texas corporation and a financial holding company (the “Company”)
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Security:
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9.00% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock (the “Preferred Stock”)
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Size:
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$15.0 million (1,500,000 shares of Preferred Stock)
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Option to purchase additional shares:
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$2.25 million (225,000 shares of Preferred Stock)
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Trade Date:
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May 10, 2019
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Settlement Date:
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May 14, 2019 (T+2)
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Public Offering Price:
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$10.00 per share of Preferred Stock
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Maturity:
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Perpetual
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Liquidation Preference:
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$10.00 per share of Preferred Stock
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Dividend Payment Dates:
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If declared, dividends will be payable on February 15, May 15, August 15 and November 15 of each year. The first dividend
payment will be made on August 15, 2019.
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Dividend Rate (Non-cumulative):
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At a rate per annum equal to 9.00% from, and including, the original issue date to, but excluding, May 15, 2024; and from and
including May 15, 2024, a floating rate equal to the then current three-month LIBOR, provided that if the three-month LIBOR rate is less than zero, then the three-month LIBOR rate shall be deemed to be zero, plus 672.0 basis points; in each
case, only when, as, and if declared.
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Day count:
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30/360 from the original issue date to, but excluding, May 15, 2024, and a 360-day year and the number of days actually
elapsed from and including May 15, 2024.
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Optional Redemption:
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The Preferred Stock may be redeemed at the Company’s option, and subject to regulatory approval, at a cash redemption price
equal to $10.00 per share of Preferred Stock, plus any declared and unpaid dividends, without regard to any undeclared dividends to, but excluding, the date of redemption (i) in whole or in part, on any dividend payment date on or after May
15, 2024 with not less than 30 days’ and not more than 60 days’ notice prior to the date of redemption specified in the notice, or (ii) in whole, but not in part, at any time within 90 days following a “Regulatory Capital Treatment Event,”
as described and subject to the limitations in the prospectus. The holders of the Preferred Stock will not have the right to require redemption or repurchase of the Preferred Stock.
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Use of Proceeds:
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The Company intends to use approximately $1.9 million of the net proceeds to repay its bank stock loan, $8.0 million to offer
to repurchase, in full, as promptly as practicable after the offering and subject to the receipt of any requisite regulatory approval, the Series A preferred stock. The Company intends to contribute the remaining proceeds (approximately
$3.3 million) to the Bank to support its capital position, to finance potential acquisitions, and for general corporate purposes.
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Underwriting Discount:
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$0.40 per share
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Net Proceeds (after expenses & Underwriter Discount):
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$13.2 million (excluding any exercise of the underwriters’ option to purchase additional shares)
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Lead Book-Running Manager:
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Sandler O’Neill & Partners, L.P.
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Joint Book-Running Manager:
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Sanders Morris Harris LLC
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Co-Manager:
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American Capital Partners, LLC
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CUSIP:
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87217L 208
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ISIN:
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US87217L2088
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Listing:
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The Company has filed an application to list the Preferred Stock with the Nasdaq Global Market under the symbol “TECTP.” If
the application is approved, trading of the Preferred Stock is expected to begin within 30 days after the original issue date.
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