Premier Service Bank has received $4 million in new capital through the US Department of the Treasury’s capital purchase program.
Premier Service Bank has said that its total risk-based capital ratio of 10.94% at December 31, 2008 was already above the regulatory requirement of 10% for a well-capitalized institution. With the additional $4 million of tier one capital from the sale of preferred stock to the Treasury, the bank’s total risk-based capital ratio increased to 13.9%. Additionally, the bank’s tier one leverage capital ratio increased to 11.1%, from 8.9% at December 31, 2008.
Under the terms of the capital purchase program (CPP), Premier Service Bank issued to the US Department of the Treasury, in exchange for aggregate consideration of $4 million, a total of 4,000 shares of series A fixed-rate non-cumulative perpetual preferred stock and a warrant for the purchase of 200 shares of warrant preferred stock. The warrant was exercised immediately upon close of the transaction.
The dividend rate on the $4 million of series A preferred stock is 5% per year for five years and then increases to 9% per year, payable $50,000 per quarter for the first five years, and the dividend rate on the $200,000 liquidation value of the warrant preferred stock is 9% per year, payable $4,500 per quarter.
Kerry Pendergast, president and CEO of Premier Service Bank, said: We are pleased to be among the nation’s financially strong banks that were accepted by the Treasury for participation in this program. The CPP funds will enhance our capacity to lend and our ability to support economic activity for the benefit of the markets we serve.
