Highlands Bancorp (HSBK) in Vernon, N.J., has raised $5 million by placing subordinated debt.

The $224 million-asset company said in press release that it plans to use the funds to supplement capital levels and for long-term strategic growth. Highlands did not identify the entity that obtained the debt.

There has been a recent revival in the issuance of subordinated debt since activity slowed down during the financial crisis. Publicly U.S. banks and thrifts issued about $12.3 billion in subordinated debt last year, according to SNL Financial. That amount compares to a total of $2.8 billion of subordinated debt that publicly traded banks issued from 2009 to 2012.

The increased demand lets banks raise capital at a cheaper rate compared to issuing equity, while filling a funding gap left by the downfall of trust-preferred securities.

FIG Partners was the placement agent for Highlands. Windels Marx provided legal advice.

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