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The U.S. Department of the Treasury has priced a secondary public offering of the remaining 1,085,554 shares of common stock of CommunityOne Bancorp (the Company) it holds at $9.35 per share. The aggregate net proceeds to Treasury from the offering are expected to be $10.1 million.
After this offering, Treasury will no longer hold any shares of the Company’s common stock.
The Treasury will continue to hold warrants to purchase 22,072 shares of the Company’s common stock – the disposition of which will provide additional proceeds to taxpayers. Treasury’s initial preferred stock investment in the Company, made as part of the Troubled Asset Relief Program’s (TARP) Capital Purchase Program (CPP), was exchanged for common stock on October 21, 2011 as part of a larger recapitalization of the Company. Today’s sale is part of the Treasury’s ongoing efforts to exit its remaining TARP investments and recover taxpayer dollars.
TARP’s bank programs have already earned a significant profit for taxpayers. Including the expected proceeds from today’s transaction, the Treasury has recovered more than $273 billion from TARP’s bank programs through repayments, dividends, interest, and other income – compared to the $245 billion initially invested. Approximately $2 billion of the repayments were refinanced under the Small Business Lending Fund (SBLF). Congress created the SBLF outside of TARP and required Treasury to let CPP institutions repay TARP funds by borrowing under that program. Each additional dollar recovered from TARP’s bank programs is an additional dollar of profit for taxpayers.
The closing is expected to occur on or about May 23, 2014, subject to customary closing conditions. Keefe, Bruyette & Woods, Inc. (KBW) and Sandler O’Neill & Partners, L.P. served as joint bookrunning managers for the offering. In addition, KBW was the qualified independent underwriter for the offering. A registration statement relating to the shares in this offering was previously filed by the Company and declared effective by the Securities and Exchange Commission.
