Coastal Banking in Beaufort, S.C., has redeemed stock that it originally issued as part of the Troubled Asset Relief Program, after it obtained a $10 million loan.
The $439 million-asset company on Nov. 10 closed a $10 million senior debt raise from the $2.2 billion-asset NexBank in Dallas. The holding company for CBC National Bank used the proceeds to redeem stock it had issued in December 2008 to the Treasury Department under Tarp.
Private investors had acquired the preferred stock from Treasury in a March 2013 auction. The preferred shares carried a 9% dividend.
Coastal Banking's loan agreement with NexBank carries a 4% Libor rate that requires monthly principal payments. The loan is scheduled to mature in 2020.
After redeeming the preferred stock and refinancing into a loan with better rates, Coastal Banking projects the moves will produce additional net income of $600,000, or 23 cents per share, over the next 12 months.
Bryan Cave was legal counsel to Coastal Banking on the senior debt raise. Kennedy Sutherland was counsel to NexBank.