HOUSTON, April 18 /PRNewswire-FirstCall/ -- Franklin Bank Corp. (Franklin) announced today that it has closed the offering of $100,000,000 of 4% Contingent Convertible Senior Notes due 2027.
The notes will bear interest at the rate of 4% per annum, payable semiannually in arrears, and will be convertible at a conversion price of $22.00 per share, subject to adjustment, which represents a 40% conversion premium over the April 12 closing price of Franklin's common stock of $15.70 per share.
Anthony J. Nocella, President and CEO, stated: "We evaluated our possible capital options and concluded that these notes were the best alternative for Franklin. The decision was primarily based on our current stock price, the relatively low dilution to our shareholders, and the low interest rates on these notes. For example, a 50% increase in the stock price will only dilute the current shareholders 1.2%."
Franklin intends to use the net proceeds from the offering to finance a portion of the purchase price of The First National Bank of Bryan in Bryan, Texas.
Company Overview
Franklin Bank Corp., headquartered in Houston, Texas, was formed in April 2002. Franklin's common stock initiated trading on the NASDAQ in December 2003 under the ticker symbol FBTX. In May 2006, Franklin raised additional capital through a Preferred Stock offering that is now trading on the AMEX under the ticker symbol FBK-P. Franklin's community banking philosophy focuses on a high growth commercial lending approach outside the major metropolitan cities in Texas.
Forward-Looking Statements
This announcement includes forward-looking statements. These forward- looking statements include statements with respect to our notes offering. However, by their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. The risk exists that these statements may not be fulfilled. We caution readers not to place undue reliance on these forward-looking statements as a number of factors could cause future company results to differ materially from these statements.
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