CalWest Bancorp in Irvine, Calif., has raised $14 million through a private offering to recapitalize and to retire its Troubled Asset Relief Program funds.
The private offering consisted of 43.5 million shares of common stock at a price of 20 cents per share and 53,000 mandatorily convertible preferred shares at a price of $100 per share.
The convertible shares can convert into a total of 26.5 million shares. The money raised through the private offering is expected to fulfill the remaining requirements of the company's consent order with the Office of the Comptroller of the Currency, according to Glenn Gray, president and chief executive of CalWest Bancorp and its $138 million-asset subsidiary, South County Bank.
"This successful recapitalization will allow the bank and the holding company to increase their respective capital and capital-related ratios to levels well in excess of regulatory requirements," Gray said in a Dec. 24 news release.
Of the $14 million raised, $6.7 million will go toward South County Bank for growth capital and to meet regulatory requirements. Another $4.9 million will be used to retire TARP funds the bank received in January 2009.
The remaining balance will be used to pay deferred interest associated with its outstanding trust-preferred securities and to retain excess capital at the holding company.
FIG Partners served as sole placement agent and Stuart |Moore served as legal counsel in the private offering.