The company issued 10,200 shares of cumulative preferred stock & a warrant to purchase 99,157 shares of common stock
North Central Bancshares, the holding company for First Federal Savings Bank of Iowa, has completed the sale of $10.2 million in preferred stock and related warrants to the U.S. Treasury Department through the capital purchase programme.
Under the terms of the transaction, the company issued 10,200 shares of cumulative preferred stock and a warrant to purchase 99,157 shares of North Central Bancshares common stock at an exercise price of $15.43 per share.
The preferred shares will bear an annualised dividend rate of 5% for the first five years when it is outstanding, after which the dividend will increase to 9%.
David Bradley, chairman and CEO of North Central Bancshares, said: We are pleased to have the opportunity to participate in this capital purchase programme (CPP) available to the nation’s healthiest banks. This investment will further enhance our already well-capitalised position. This will, in turn, increase our capacity to support economic activity and growth in each of the communities we serve through responsible lending.
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.