Monarch Financial (MNRK) in Chesapeake, Va., is getting rid of preferred stock it issued in 2009.
The holding company for the $1.2 billion-asset Monarch Bank said Thursday that it will convert all outstanding shares of its Series B cumulative convertible preferred stock to common stock. There are roughly 300,000 shares of preferred stock in that series, worth about $10.7 million based on Thursday's closing price.
The conversion will take place on March 8, Monarch said. Each preferred share will be converted to 3.75 shares of common stock, which currently trade at just over $10, and cash will be issued in place of fractional shares. The common stock has been trading above a pre-established conversion price that lets the company pursue the conversion.
Monarch issued the stock for $25 a share, Brad Schwartz, the company's chief executive, said in a press release. "The return on this investment has been very strong for our shareholders and they have been well rewarded," he said. "The return of our capital to common stock and the anticipated growth in our net income available to common shareholders will have a positive impact on our shareholders."
Monarch has been expanding operations in its home state, launching a wealth management unit last year.