The corporation also issued warrants to the Treasury to purchase 173,410 shares of common stock
Center Bancorp, the parent company for Union Center National Bank, has issued $10 million in its non-voting senior preferred stock to the U.S. Department of Treasury under the capital purchase programme.
As part of the transaction, the corporation also issued warrants to the Treasury to purchase 173,410 shares of common stock of the corporation at an exercise price of $8.65 per share.
Anthony Weagley, president and CEO of Center Bancorp (CNBC), said: As we have previously announced, we believe that our voluntary participation in the capital purchase programme makes good sense for CNBC, providing us with an attractive low-cost alternative to other capital sources in today’s market.
The capital raised, which amounted to approximately 50% of what CNBC had qualified for under the Treasury programme, will significantly strengthen our financial position during these challenging economic times. We will invest these funds to support future loan growth in the markets we serve.
The U.S. Treasury recently created the capital purchase programme (CPP) which is part of the troubled assets relief programme to encourage qualifying U.S. financial institutions to increase the flow of financing to businesses and consumers, thereby restoring liquidity and stability to the U.S. financial system. Companies participating in the programme must adopt the Treasury Department’s standards for executive compensation and corporate governance, for the period during which Treasury holds equity issued under this programme. These standards generally apply to the chief executive officer, chief financial officer and the next three most highly compensated executive officers. The approval is subject to certain conditions and the execution of definitive agreements.