It has been seven years, and it's going to take about $16.1 million, but First Reliance Bancshares in Florence, S.C., says it is about to close a key chapter in its post-crisis recovery and is ready to ramp up growth.
The $380 million-asset company recently paid $4 million to buy back some of its Troubled Asset Relief Program shares from investors who had acquired them, and it plans to spend another $12.1 million to buy back the rest of them, the company said in a news release Friday.
First Reliance redeemed 26.1%, or 4,000 shares, of its outstanding Series A preferred stock that was originally issued to the Treasury Department under Tarp in 2009. The Treasury in March 2013 sold all 15,349 of its Series A shares in First Reliance, and some Series B preferred shares, to private investors.
The company also plans to buy back 11,349 more shares of Series A stock for $11.3 million, and 767 shares of Series B stock for $767,000, provided it received regulatory approval, the release said.
Last year First Reliance said that it had paid the investors about $5 million in dividends and interest that had been in deferral since November 2011.
"We are pleased to be in a position to replace the securities originally issued to the U.S. Treasury under the Tarp Capital Purchase Program with lower-cost financing alternatives," President and Chief Executive Rick Saunders said in Friday's release.
The buyback of the Tarp shares will reduce the company's after-tax interest expense and is expected to boost earnings per share by $0.21 per share a year, or approximately $977,000 in additional net income to common stockholders, the release said.
The company is focused on expansion in the coastal and midlands regions of South Carolina, growth of its portfolios of one- to four-family mortgages and consumer loans and other priorities, Saunders was quoted as saying in the release.