Severn Bancorp in Annapolis, Md., has agreements in place to raise $11 million through a private placement of common stock.
The $762 million-asset company said in a press release Friday that it will sell about 2 million shares of common stock at $5.50 each to unnamed institutional investors, as well as its own directors and executive officers.
Some of the proceeds will likely be used to redeem Severn’s series B preferred stock, along with paying all accrued and unpaid interest and dividends on those shares. Other funds could be used for working capital and other purposes.
"This financing will strengthen the company,” Alan Hyatt, Severn’s president and chief executive, said in the release. “It will support its growth and our efforts to continue to lend in and enhance our community.”
