Rocky Mount, N.C.-based PB Financial Corp. completed a private placement of $12.0 million aggregate principal amount of subordinated notes to certain qualified institutional and other accredited investors.

The notes are structured to qualify as Tier 2 capital for regulatory capital purposes. The company intends to use the net proceeds of the offering to support organic growth, fund future acquisitions and for general corporate purposes, including investments in unit Providence Bank.

The notes will initially bear interest at a rate of 5.375% per annum from and including Dec. 18, to but excluding Jan. 15, 2025. Interest during this period will be paid semiannually in arrears.

From and including Jan. 15, 2025, to but excluding the maturity date or earlier redemption date, the interest rate will reset quarterly to an annual floating rate equal to the three-month London interbank offered rate, or an alternative rate determined in accordance with the terms of the notes if the three-month Libor cannot be determined, plus 3.736%. Interest during this period will be paid quarterly in arrears.

PB Financial may redeem the notes, in whole or in part, on or after Jan. 15, 2025, or, in whole but not in part, under certain circumstances. The notes are not subject to redemption at the option of the holders.

Janney Montgomery Scott LLC served as sole placement agent, and Wyrick Robbins Yates & Ponton LLP served as PB Financial's legal counsel on the offering. Grady & Associates provided legal counsel to the placement agent in connection with the offering.