Central Federal (CFBK) has restructured a planned capital raise and reached a deal with the Treasury Department that would help it exit the Troubled Asset Relief Program.

The $240 million-asset company would be able to repay just $3 million of the $8 million that it owes the Treasury Department if it can raise $22.5 million on its own in a rights offering.

The Fairlawn, Ohio, company has been operating under a cease-and-desist order that requires its bank to maintain a core capital ratio of at least 8% and a total risk-based capital ratio of at least 12%. At March 31, its CFBank had a core capital leverage ratio of 5.39% and a total risk-based capital ratio of 10.55%, according to the Federal Deposit Insurance Corp.

In August, Central Federal announced a plan to raise up to $30 million but it was not able to complete that offering. The bank said in April that it would restructure the terms of the offering.

Central Federal said Wednesday that the restructured capital raise will include an $18 million rights offering where common stock shareholders will receive one subscription right for each share that they own. For each subscription right, they will be able to purchase roughly 14.5 shares of common stock at $1.50 per share.

Additionally, a group of investors led by Timothy O'Dell, a former regional president at Fifth Third Bancorp (FITB) and a director at Central Federal, Thad R. Perry, also a director of Central Federal, and Robert E. Hoeweler, the company's chairman, will purchase $4.5 million of stock at $1.50 per share.

The Treasury Department has cut similar deals with other struggling banks, including Sterling Financial (STSA) in Spokane, Wash., Pacific Capital (PCBC) in Santa Barbara, Calif., and Broadway Financial (BYFC) in Los Angeles.

Columbus Business First reported Central Federal's deal with the Treasury Department on Wednesday.

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