Recovering Calif. Thrift Sells $26M of Stock

California's Redfed Bancorp raised $26 million in a secondary offering of stock, solidifying its recovery and cushioning the blow from an expected deposit insurance assessment.

Redfed chief executive Ann Bacon said the thrift holding company will now be "well capitalized" for regulatory purposes. The new capital wasn't called for under its supervisory agreement with the Office of Thrift Supervision, but raising it was a prudent step in assuring the company's future after a period of uncertainty marked by asset-quality problems, she said.

"Our nonperforming-asset situation has improved dramatically," she said of the $840 million-asset company. "Our nonperformers went from $110 million a year ago to about $35 million on June 30."

Ms. Bacon said the new capital was designed to help the company pay its expected assessment to recapitalized the Savings Association Insurance Fund of the Federal Deposit Insurance Corp. All thrifts will pay a special assessment to recapitalize the fund, the size of the assessment depending on the size of the thrift.

She said one early estimate placed the Redlands Federal Bank, the company's thrift subsidiary, bill at $6 million.

"With the special assessment it was likely that we would have become undercapitalized without the new capital," Ms. Bacon said.