S.Y. Bancorp (SYBT) in Louisville, Ky., plans to redeem $30 million of trust-preferred securities.
The $2.3 billion-asset company said Wednesday that it will redeem all its 10% fixed-rate trust-preferred securities on Jan. 1. S.Y. said it expects to pay face value plus unpaid dividends for the securities, it said.
S.Y. plans to use cash on hand for the redemption. It will also write off $1.3 million in debt-issuance costs in association with the transaction.
S.Y. said its capital ratios will remain above the regulatory minimum after the redemption. At June 30, its bank, Stock Yards Bank & Trust, had a Tier 1 leverage ratio of 9.11% and total risk-based capital of 12.39%, according to the Federal Deposit Insurance Corp.
"We are pleased that the company's strong capital position allows us to extinguish this debt in full at this time," David Heintzman, S.Y.'s chairman and chief executive, said in a press release. "In doing so, we will eliminate related future interest costs, thereby adding 13 cents to our annual earnings per diluted share going forward."
Last December, S.Y. agreed to buy The Bancorp in La Grange, Ky., for about $19.5 million in cash and stock.