Central Federal in Worthington, Ohio, raised roughly $12 million from a private placement of preferred stock.

The $245 million-asset company said in a press release Monday that it sold 480,000 shares of 6.25% noncumulative convertible perpetual preferred stock to accredited investors. Net proceeds were about $11.4 million.

Central Federal said it sold 270,000 shares on May 12 and 210,000 shares on July 15. Each share of preferred stock is convertible into about 14.29 shares of common stock based on a conversion price of $1.75 a share that is subject to "certain anti-dilution adjustments."

The company also said it had issued warrants to buy nearly 1.2 million shares of common stock to the groups that bought the preferred stock. 

The stock is subject to a restriction that limits the conversion of the preferred stock and warrants to less than 19.9% of the company's total outstanding common stock, or voting power, unless stockholders decide otherwise. Central Federal also noted that the securities cannot be resold without registration or an exemption from registration under the Securities Act and applicable state securities laws.

This private placement allows the company to increase capital levels at the company and its bank, while also funding "continued growth and expansion," Timothy O'Dell, Central Federal's chief executive, said in the release. The bank has struggled in the past with capitalization issues; regulators have also required the bank to maintain a 12% risk-based capital ratio.

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