First Keystone Corporation has entered into Subordinated Note Purchase Agreements with institutional investors to sell $32,500,000 in aggregate principal amount of 7.50% fixed-to-floating rate subordinated notes due September 30, 2036. The notes were issued at a price equal to 100% of their face amount in a private placement.
The notes are intended to qualify as Tier 2 capital under Federal Reserve capital guidelines. Interest is calculated at a fixed annual rate of 7.50% for the period up to, but excluding, September 30, 2031. Following this Fixed Interest Rate Period, the rate will adjust to a floating rate equal to the Three-Month Term SOFR plus 277 basis points.
According to the filing, the Company intends to use the net proceeds from the sale of the notes to redeem $25,000,000 in subordinated notes due December 31, 2030, as well as for general corporate purposes. The notes are unsecured and subordinated obligations of the Company, ranking junior to senior indebtedness and secured creditors. Subject to limited exceptions, the Company cannot redeem the notes before September 30, 2031.
Performance Trust Capital Partners, LLC served as the Company's placement agent, and the transaction was completed on September 30, 2026.
