Central Bancorp Receives $10.0 Million of Capital From Small Business Lending Fund, Redeems Preferred Stock Issued Under the ...
August 25 2011 - 3:00PM
Marketwired
Central Bancorp, Inc. (NASDAQ: CEBK) (the "Company") today
announced that the U.S. Department of Treasury has invested $10.0
million in the Company's preferred stock under the Small Business
Lending Fund (the "SBLF"). The SBLF is a voluntary program intended
to encourage small business lending by providing capital to
qualified community banks at favorable rates. The initial interest
rate on the SBLF funds will be 5% and may be decreased to as low as
1% if the Company experiences specific growth rates in its small
business lending portfolio.
With the proceeds from this investment, the Company has redeemed
all $10.0 million of the preferred stock that it sold to the
Treasury under the TARP Capital Purchase Program on December 5,
2008. In conjunction with the Company's participation in the TARP
Capital Purchase Program, the Treasury also received a warrant to
purchase up to 234,742 shares of the Company's common stock at an
exercise price of $6.39 per share. The Company is currently
evaluating whether to seek agreement with the Treasury to
repurchase the warrant at its fair market value. However, there can
be no assurance that the Company will reach an agreement with the
Treasury as to a fair market value of the warrant, or that the
Company will repurchase the warrant.
Central Bancorp, Inc. is the holding company for Central Bank,
whose legal name is Central Co-operative Bank, a
Massachusetts-chartered co-operative bank operating nine
full-service banking offices, a limited service high school branch
in suburban Boston and a standalone 24-hour automated teller
machine in Somerville.
This press release may contain certain forward-looking
statements, which are based on management's current expectations
regarding economic, legislative and regulatory issues that may
impact the Company's earnings in future periods. Factors that could
cause future results to vary materially from current management
expectations include, but are not limited to, general economic
conditions, changes in interest rates, deposit flows, changes in
the growth of the Company's small business lending portfolio, real
estate values and competition, changes in accounting principles,
policies or guidelines, changes in legislation or regulation, and
other economic, competitive, governmental, regulatory and
technological factors affecting the Company's operations, pricing,
products and services.
Contact: Paul S. Feeley Senior Vice President, Treasurer and
Chief Financial Officer (617) 628-4000
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