Blackhawk Bancorp Redeems TARP Shares
29 April 2014 - 6:34AM
Business Wire
Blackhawk Bancorp, Inc. (OTCBB: BHWB) announced that it
has redeemed all 10,000 shares of its Fixed Rate Cumulative
Perpetual Preferred Stock, Series B and all 500 shares of its Fixed
rate Cumulative Perpetual Preferred Stock, Series C (collectively
referred to as “TARP Preferred”). The securities, which were
initially issued to the U.S. Treasury under the Troubled Asset
Relief Program (“TARP”) Capital Purchase Program, were redeemed at
the stated liquidation value of $1,000 per share, or $10.5 million,
plus accrued dividends on April 25, 2014.
The shares, which were issued in March, 2009 were redeemed from
private investors that had purchased the securities from the U.S.
Treasury in a Dutch auction in October of 2012. The funds for the
redemption came from existing financial resources and the proceeds
of a $9 million senior credit facility. “The TARP Capital Purchase
Program, which was designed to provide capital to healthy financial
institutions to promote confidence and stabilization in the
economy, served its purpose for Blackhawk,” said Rick Bastian, the
company’s president & CEO. “The TARP Preferred provided a
capital cushion giving us the confidence to continue lending to
businesses and individuals in the Stateline area when they and the
economy needed it the most. At that time, there were virtually no
other capital options available.” he added.
The annualized cost of the TARP Preferred for the first five
years was 6.45%, including the cost of warrants that were
exercised; however the dividend was scheduled to increase to 9.0%
next month. The redemption of these securities will not only avoid
the increased cost that the company would have incurred, it will
improve earnings available to common shareholders as the after tax
cost of the replacement funding is substantially less than the
6.45% annualized cost incurred the last five years.
About Blackhawk Bancorp
Blackhawk Bancorp, Inc. is headquartered in Beloit, Wisconsin
and is the parent company of Blackhawk Bank, which operates eight
banking centers in south central Wisconsin and north central
Illinois, along the I-90 corridor from Belvidere, Illinois to
Beloit, Wisconsin. Blackhawk’s locations serve individuals and
small businesses, primarily with fewer than 200 employees. The
company offers a variety of value-added consultative services to
small businesses and their employees related to its banking
products such as health savings accounts and investment
management.
Forward-Looking Statements
When used in this communication, the words “believes,”
“expects,” and similar expressions are intended to identify
forward-looking statements. The company’s actual results may differ
materially from those described in the forward-looking statements.
Factors which could cause such a variance to occur include, but are
not limited to: heightened competition; adverse state and federal
regulation; failure to obtain new or retain existing customers;
ability to attract and retain key executives and personnel; changes
in interest rates; unanticipated changes in industry trends;
unanticipated changes in credit quality and risk factors, including
general economic conditions; success in gaining regulatory
approvals when required; changes in the Federal Reserve Board
monetary policies; unexpected outcomes of new and existing
litigation in which Blackhawk or its subsidiaries, officers,
directors or employees is named defendants; technological changes;
changes in accounting principles generally accepted in the United
States; changes in assumptions or conditions affecting the
application of “critical accounting policies”; and the inability of
third party vendors to perform critical services for the company or
its customers.
Further information is available on the Company’s website at
www.blackhawkbank.com.
For further information:Blackhawk Bancorp, Inc.R. Richard
Bastian, III, President & CEOrbastian@blackhawkbank.comorTodd
J. James, EVP & CFOtjames@blackhawkbank.comPhone: (608)
364-8911
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