NewBridge Bancorp (NBBC) in Greensboro, N.C., has issued nearly $16 million in subordinated debt to redeem all the preferred stock it issued under the Troubled Asset Relief Program.
The $2 billion-asset company said late Friday that it had placed the notes with "certain accredited investors," including directors. The 7.25% notes are due March 14, 2024. "Subordinated debt is a form of low-cost regulatory capital," Presley Ridgill, the company's president and chief executive, said in a press release.
NewBridge will use proceeds to redeem preferred stock with a dividend rate that is poised to increase from 5% to 9% this year.
The moves should improve the company's annual earnings per share by about 2 cents, Frank Barlow, an analyst at Keefe, Bruyette & Woods, wrote in a Monday note to clients. The debt should count at Tier 2 capital, he added.
NewBridge, which agreed to buy CapStone Bank in Raleigh, N.C., last year, has expressed hope of becoming a consolidator in North Carolina.