WASHINGTON – As part of the strategy it outlined last month for winding down its remaining Troubled Asset Relief Program (TARP) bank investments, the U.S. Department of the Treasury announced that it priced secondary public offerings of the preferred stock it holds in the following seven financial institutions at the following prices per share:
Fidelity Southern Corporation (Atlanta, GA), all of its 48,200 shares at $900.60 per share (approximately $43 million net proceeds);
Firstbank Corporation (Alma, MI), all of its 33,000 shares at $941.01 per share (approximately $31 million net proceeds);
First Citizens Banc Corp (Sandusky, OH), all of its 23,184 shares at $906.00 per share (approximately $21 million net proceeds);
MetroCorp Bancshares, Inc. (Houston, TX), all of its 45,000 shares at $981.17 per share (approximately $43 million net proceeds);
Peoples Bancorp of North Carolina, Inc. (Newton, NC), all of its 25,054 shares at $933.36 per share (approximately $23 million net proceeds);
Pulaski Financial Corp. (St. Louis, MO), all of its 32,538 shares at $888.00 per share (approximately $28 million net proceeds); and
Southern First Bancshares, Inc. (Greenville, SC), all of its 17,299 shares at $904.00 per share (approximately $15 million net proceeds).
The aggregate net proceeds to Treasury from the seven offerings are expected to be approximately $204 million, which was an overall total of 11 percent above the minimum prices set for the auctions. The prices above reflect a liquidation amount per share of $1,000 for the preferred stock of each institution. At settlement, winning bidders will be required to pay the clearing price for the preferred stock plus accrued and unpaid dividends on the preferred stock from and including May 15, 2012.
TARP’s bank programs have already earned a significant profit for taxpayers. Including the expected proceeds from the transactions announced today, Treasury has recovered $264 billion from TARP’s bank programs to date through repayments, dividends, interest, and other income – a $19 billion positive return compared to the $245 billion initially invested. Each additional dollar recovered from TARP’s bank programs is an additional dollar of profit for taxpayers.
These auctions are part of the strategy that Treasury outlined last month for winding down its remaining TARP bank investments in a way that protects taxpayer interests, promotes financial stability, and preserves the strength of our nation’s community banks. Treasury indicated that it intends to use a combination of repayments, restructurings, and sales to manage and recover those remaining investments. As described in the announcement, sales would include auctions of individual investments, as well as potentially combining individual investments together into auction pools.
In the coming weeks, Treasury intends to announce additional individual auctions of its CPP preferred stock investments. The next set of individual auctions is expected to be conducted in late July and include CPP investments in privately held financial institutions. Beginning in the
fall of 2012, Treasury also expects to conduct the first in a series of pooled auctions of CPP preferred stock.
“We again saw strong demand in these auctions, which brought in new private capital to help community banks replace temporary government support,” said Timothy G. Massad, Assistant Secretary for Financial Stability. “Moving forward, we believe that the strategy we’ve outlined for winding down these investments will help support our nation’s community banks and provide an additional positive return for taxpayers on TARP's bank programs.”
The closing is expected to occur on or about July 3, 2012, subject to customary closing conditions. The offering was priced through a modified Dutch auction. Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and Sandler O’Neill + Partners, L.P. (“Sandler O’Neill”) were the auction agents and joint bookrunning managers for the offerings. Houlihan Lokey Capital, Inc. is serving as financial advisor to Treasury with respect to the management and disposition of its Capital Purchase Program investments.
Each series of preferred stock is being sold pursuant to an effective shelf registration statement previously filed by the applicable issuer with the Securities and Exchange Commission (the “SEC”). Preliminary prospectus supplements related to each offering were filed with the SEC on June 25, 2012, and a final prospectus supplement related to each offering will be filed by the applicable issuer with the SEC and will be available on the SEC’s website at http://www.sec.gov.
Copies of the final prospectus supplements relating to the offerings may be obtained, when available, from Merrill Lynch via email at email@example.com or (800) 294-1322 or from Sandler O’Neill via email at firstname.lastname@example.org or (866) 805-4128.
Before you invest, you should read the prospectus and prospectus supplement in the registration statement and other documents the applicable issuer has filed with the SEC for more complete information about the issuer and the preferred stock.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
For more details on Treasury’s lifetime cost estimates for TARP programs, please visit Treasury’s Monthly 105(a) Report to Congress on TARP at this link.