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July 30, 2020

Happy Bancshares Inc. Announces Completion of $140 Million Subordinated Debt Offering

HAPPY, TX – Happy Bancshares, Inc., (“HBI”), a Texas corporation and holding company of Happy State Bank (the “Bank”), announced the closing of its $140 million private placement of subordinated notes.

“We are happy to announce the successful completion of our subordinated debt offering,” said J. Pat Hickman, Chairman & President of HBI. “This offering was oversubscribed, and we are very pleased with the group of investors who participated. We believe the quality of this offering’s investor base speaks highly of HBI’s financial fundamentals and commitment to credit quality.”

The notes have a maturity date of July 31, 2030 and carry a fixed rate of interest of 5.50% for the first five years. Thereafter, the notes will pay interest at 3-month SOFR plus 543.5 basis points, resetting quarterly. The notes include a right of prepayment without penalty on or after July 31, 2025. The subordinated notes have been structured to qualify as Tier 2 capital for regulatory purposes.

CEO Mikel Williamson further commented, “The subordinated notes will allow us to support our strategic growth plans and to fuel our commitment to our friends and neighbors in our communities. We were very pleased with the positive response from the investment community, which included many Texas banks.”

The Company plans to use the proceeds from the placement of the subordinated notes to refinance the existing $72.5 million existing subordinated notes. The remaining proceeds will be applied towards general corporate purposes.

Stephens Inc. served as the lead-placement agent and Piper Sandler & Co. served as the co-placement agent for the private offering. The Company was advised by Norton Rose Fulbright US LLP and the placement agents were advised by Hunton Andrews Kurth LLP.

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