Central Pacific Financial Corp. in Honolulu has received approval from regulators to complete a much-needed $325 million capital injection.
The $3.9 billion-asset company also said that, in connection to the private placement, it received approval from the Treasury Department to complete a stock exchange tied to its Troubled Asset Relief Program funds. The Treasury will exchange 135,000 shares of Central Pacific's preferred stock, including accrued and unpaid dividends, for 5.6 million shares of common stock. The approvals were announced Thursday.
The private placement was approved by the Federal Reserve, the Federal Deposit Insurance Corp. and the Hawaii Division of Financial Institutions. The company also said it is launching a common stock rights offering at the same price as the private placement of $10 a share, with plans of raising $20 million. A one-for-20 reverse stock split was completed earlier this month in conjunction with the recapitalization.
At Dec. 31, Central Pacific was adequately capitalized with a total risk-based capital ratio of 8.98%. Central Pacific said in its fourth-quarter earnings that the recapitalization would help it exceed the capital ratio requirements in its consent order with the FDIC and state regulator.