Treasury invests $35 million in Porter Bancorp
Business First of Louisville
Porter Bancorp Inc. has completed the sale of $35 million of preferred stock to the U.S. Treasury Department under the Capital Purchase Program.
Porter (NASDAQ: PBIB), parent company of PBI Bank, issued senior preferred shares to the U.S. Treasury that pay a cumulative annual dividend rate of 5 percent for the first five years and will reset to a dividend rate of 9 percent after five years, according to a news release
“The $35 million sale of preferred stock will raise Porter Bancorp’s Tier 1 capital ratio to 12.21 percent from 9.55 percent and its total capital ratio to 14.14 percent from 11.49 percent, on a pro forma basis at Sept. 30,” Maria L. Bouvette, president and CEO of Porter, said in the release.
“The new capital will strengthen our already solid capital base and provide Porter Bancorp with increased flexibility to serve our customers and support our growth and expansion opportunities,” she said.
The company also issued the U.S. Treasury a warrant to buy 299,829 Porter common shares at $17.51 per share, which would represent an aggregate investment, if exercised, of $5.25 million in company common stock, or 15 percent of the senior preferred investment.
The common stock underlying these warrants represents 3.66 percent of the company’s outstanding common shares on a pro forma basis at Sept. 30.
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