Shares of Center Financial Corp. rose Wednesday after the Los Angeles company said that it raised $12.8 million of capital.
The $2.2 billion-asset Center said it issued 3.36 million shares of common stock to directors, management, friends and other investors in a private placement.
The company insiders paid $4.69 a share, which was the closing price for the stock on Nov. 24. The others paid $3.71 a share, which is a 5% discount from the average trading price for the five days preceding Nov. 19.
The proceeds would boost the company's total risk-based capital ratio, which had been 13.42% at the end of the third quarter, to 14.16%, Jae Whan "J.W." Yoo, its president and chief executive officer, said in a press release issued after the market closed Tuesday.
"The additional capital strengthens our liquidity position ahead of a slow but positively trending economy, ensures that we have adequate capital to address potential future impacts from the weak economy and supports future growth," Yoo said.
He described the transaction as "considerably oversubscribed."
Center reported a $3.3 million loss available to common shareholders in the third quarter, compared with a $3.2 million loss the year earlier. Its provision quintupled to $10.6 million, as nonperforming loans increased 412%, to $43 million, or 2.70% of total loans.
Center's stock, which has lost about 30% of its value over the past year, climbed 4.16% by midafternoon Wednesday, to $4.76%.