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 Treasury Department Announces $43.5 Million in Proceeds from Pricing of Public Offerings of Preferred Stock of Yadkin Valley Financial Corporation


9/13/2012

Auctions Part of Treasury’s Continued Efforts to Wind Down TARP’s Bank Programs 

Proceeds Deliver Additional Profit for Taxpayers on TARP’s Bank Programs 

WASHINGTON – As part of the strategy it outlined for winding down its remaining Troubled Asset Relief Program (TARP) bank investments, the U.S. Department of the Treasury announced that it priced a secondary public offering of the preferred stock it holds in Yadkin Valley Financial Corporation at the following prices per share:

All of its 36,000 shares of Fixed Rate Cumulative Series T Perpetual Preferred Stock, at a price of $898.00 per share (approximately $31.8 million net proceeds); and

All of its 13,312 shares of Fixed Rate Cumulative Series T-ACB Perpetual Preferred Stock, at a price of $888.00 per share (approximately $11.6 million net proceeds).

The aggregate net proceeds to Treasury from the offering are expected to be approximately $43.5 million.  The prices per share above reflect an overall total of 20.2 percent above the minimum prices set for the auctions. The prices above reflect a liquidation preference per share of $1,000.  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 August 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 now recovered $266 billion from TARP’s bank programs through repayments, dividends, interest, and other income – 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 in May 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.

The closing is expected to occur on or about September 18, 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 offering.  Houlihan Lokey Capital, Inc. is serving as financial advisor to Treasury with respect to the management and disposition of its Capital Purchase Program investments. 

Both series of preferred stock are being sold pursuant to an effective shelf registration statement previously filed by the issuer with the Securities and Exchange Commission (the “SEC”). A preliminary prospectus related to the offering was filed with the SEC on September 10, 2012, and a final prospectus related to the offering will be filed by the issuer with the SEC and will be available on the SEC’s website at http://www.sec.gov.

Copies of the final prospectus relating to the offering may be obtained, when available, from Merrill Lynch via email at dg.prospectus_requests@baml.com or (800) 294-1322 or from Sandler O’Neill via email at syndicate@sandleroneill.com or (866) 805-4128. 

Before you invest, you should read the prospectus in the registration statement and other documents the 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.

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