WashingtonFirst Bankshares in Reston, Va., has exited the Small Business Lending Fund.
The $1.5 billion-asset bank issued $25 million of subordinated notes due 2025 in a private placement. WashingtonFirst used the proceeds to redeem $8.9 million in SBLF preferred shares, which it issued to the Treasury Department in 2011.
WashingtonFirst is the latest bank to exit the program, given low interest rates allowing small banks to redeem their shares affordably. The dividend rate is also scheduled to increase to 9% from 1% next year.
WashingtonFirst plans to use the remaining proceeds to make a capital contribution to WashingtonFirst Bank. The bank used some of the proceeds to redeem $2.5 million worth of 8% subordinated notes due 2021. The redemption will increase the bank's total consolidated risk-based capital by about $13.1 million.
The subordinated-debt placement closed on Monday. Keefe, Bruyette & Woods and Sandler O'Neill were placement agents. Troutman Sanders was legal counsel to WashingtonFirst.