SOTB Bank

CONROE, Texas, July 27, 2020 /PRNewswire/ -- Spirit of Texas Bancshares, Inc. (NASDAQ: STXB) (the "Company" or "Spirit"), the holding company for Spirit of Texas Bank (the "Bank"), announced the issuance of $37 million aggregate principal amount of fixed-to-floating rate subordinated notes due 2030 ("Notes") to certain institutional accredited investors and qualified institutional buyers in a private placement. Spirit intends to use the net proceeds from this transaction for general business purposes, payment of existing indebtedness and potential future strategic opportunities.

The Notes are intended to qualify as Tier 2 capital for regulatory capital purposes.  The Notes will initially bear interest at a fixed annual rate of 6.00%, payable quarterly in arrears to, but excluding, July 31, 2025. From and including July 31, 2025, to, but excluding, the maturity date or earlier redemption date, the interest rate will reset quarterly to an interest rate per annum equal to a benchmark rate, which is expected to be the then-current three-month Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York (provided, that in the event the benchmark rate is less than zero, the benchmark rate will be deemed to be zero) plus 592 basis points, payable quarterly in arrears. Spirit is entitled to redeem the Notes, in whole or in part, on any interest payment date on or after July 31, 2025, and to redeem the Notes at any time in whole, but not in part, upon certain other specified events.

Dean O. Bass, Chairman and Chief Executive of Officer of the Company, stated, "This capital raise is a cost-effective way to increase our regulatory capital at an attractive interest rate without diluting our current shareholders.  We are very pleased with the support from the investment community that resulted in the successful completion of the offering."

Performance Trust Capital Partners, LLC served as placement agent for this offering.  Hunton Andrews Kurth LLP served as legal counsel to the Company and Fenimore, Kay, Harrison & Ford, LLP served as legal counsel to the placement agent.

This press release is for informational purposes only and shall not constitute an offer to sell, a solicitation of an offer to sell, or the solicitation of an offer to buy the Notes, nor shall there be any sale in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The Notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The indebtedness evidenced by the Notes is not a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency or fund.

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