Bank of the Carolinas, the parent of Bank of the Carolinas, has completed the issuance and sale of $13.18m in senior cumulative preferred stock under the US Treasury Department’s capital purchase programme.
This programme was established pursuant to the Emergency Economic Stabilization Act of 2008 to help stabilize the financial markets and increase the flow of financing to businesses and consumers by providing additional capital to healthy banks.
On a pro-forma basis as of December 31, 2008, the effect of the additional capital would have been to increase Bank of the Carolinas’s leverage capital ratio, tier one risk-based capital ratio and total risk-based capital ratio to 9.81%, 12.65% and 14.08%, respectively, from 7.48%, 9.64% and 11.08% as of December 31, 2008, said the bank.
Under the capital purchase programme (CPP), the treasury also received 10-year warrants to purchase 475,204 shares of Bank of the Carolinas Corporation common stock at an exercise price of $4.16 per share.
Robert Marziano, president and CEO, said: Although we are above the level at which banks and bank holding companies are classified as well capitalized under the capital adequacy guidelines of the Federal Deposit Insurance Corporation for insured banks, and the Federal Reserve Board for bank holding companies, we are pleased to be selected for participation in this program intended for financially strong institutions. This investment will further strengthen our capital ratios and our ability to support our local and regional economies during the current economic downturn.
