To US Treasury under CPP
OceanFirst Financial, the holding company for OceanFirst Bank, has completed the sale of 38,263 shares of fixed rate cumulative perpetual preferred stock, series A, totalling $38.26 million to the US Department of Treasury under the capital purchase programme of the Emergency Economic Stabilization Act of 2008.
The voluntary equity investment from the US Treasury represents 3% of total risk weighted assets as of September 30, 2008. The preferred stock issued will pay cumulative dividends to the Treasury of 5% a year for the first five years and 9% a year thereafter.
In conjunction with the preferred stock issuance, the Treasury also received a 10-year warrant to purchase 380,853 shares of common stock at an exercise price of $15.07.
John Garbrino, chairman, president and CEO of OceanFirst Financial, said: We are pleased to confirm that after careful evaluation of the Treasury’s capital purchase programme (CPP), created for select, healthy financial institutions, our board has decided to accept the Treasury’s equity investment in OceanFirst Financial. The capital infusion from the Treasury will permit us to continue our commitment to serve the credit needs of our community throughout the current economic downturn.
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.