By Jasmine Castroverde
Overland Park, Kan.-based Blue Valley Ban Corp., having received Federal Reserve approval for the transaction, redeemed its $21.8 million of series A fixed-rate cumulative preferred stock, which was originally issued to the U.S. Department of the Treasury in connection with its participation in the TARP Capital Purchase Program.
As part of the transaction, Blue Valley Ban Corp. also repaid associated accumulated dividends and interest, according to an Aug. 5 news release.
“Improved earnings and asset quality have allowed us to replace this temporary source of capital with more permanent common equity that will contribute and enable the future growth and profitability of the Company,” Chairman, President and CEO Robert Regnier said in a letter to shareholders.
The transaction included Regnier’s investment of $1 million in common stock and a combined investment of $7 million in common stock and series B convertible preferred stock by Castle Creek Capital, as well as $15.5 million in term loan funding provided by a third-party lender and existing liquidity. The common and preferred stock were issued at $7.00 per share. The convertible preferred stock bears a rate of 0% and is convertible to an equal number of common shares.
Pursuant to the transaction, which is expected to reduce the company’s cost of capital by nearly $2 million on an annual basis, Blue Valley Ban Corp. plans to appoint Tony Scavuzzo, a principal with Castle Creek, to its board of directors.