Severn Bancorp, Inc. (NASDAQ: SVBI) struck definitive deals with institutional investors, as well as some directors and executives to sell two million shares through a private placement. According to the company, the issue would be priced at $5.50 a share.
Severn Bancorp said the issue would result in about $11 million gross proceeds before deducting any expenses. The company clarified the proceeds from the private placement would be used to redeem partly its Series B preferred stock apart from general corporate and working capital purposes.
The company's President and CEO Alan Hyatt stated, "This is a very positive move for the Company. This financing will strengthen the Company. It will support its growth and our efforts to continue to lend in and enhance our community. This is a critical piece to allow us to move forward with all of our plans to be the premier community bank in Anne Arundel County."
Severn Bancorp said Compass Point Research and Trading, LLC acted as the placement agent for this transaction.
Shares of the company traded higher by 7 percent on Friday.
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