Customers Bancorp in Wyomissing, Pa., is seeking to raise as much as $133.5 million through two avenues: a newly announced preferred stock offering and previously announced secondary sales of common stock.
The $9.7 billion-asset company late last week said that it plans to sell 3 million shares of Series F fixed-rate preferred stock at $25 each. Net proceeds are expected to amount to $72.6 million, but they could rise to $83.5 million if the underwriters (FBR Capital Markets, Keefe, Bruyette & Woods and Boenning & Scattergood) exercise an option to purchase an additional 450,000 shares.
Customers plans to use the proceeds for general corporate purposes that may include working capital and funding organic growth at its bank subsidiary. That offering is set to close on Friday.
In August Customers struck an agreement with FBR Capital Markets, KBW and Maxim Group to sell $50 million in common stock periodically.
Bob Wahlman, Customers' chief financial officer, said Monday that it wants to tilt toward preferred stock in its capital-raising "because it is cheaper for the company relative to investor expectations than what common stock is."
He noted that the company must also adhere to the regulatory requirement of maintaining a Tier 1 common equity ratio of 4.5%.
"So, I'm looking at different capital ratio requirements under bank regulations, I'm listening to my shareholders, and I'm trying to optimize earnings while maintaining a proper amount of shareholder equity," he said. "So I want to do part of my capital raise in common and part in preferred because that's how I optimize my capital."