HMN Financial, Inc. to Redeem All Outstanding Shares of Preferred Stock
January 08 2015 - 10:30PM
HMN Financial, Inc. ("HMN" or the "Company") (Nasdaq:HMNF) today
announced that notice had been given to holders of record of the
Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series A
(the "Preferred Stock") of the redemption of all 10,000 shares of
outstanding Preferred Stock. The effective date of the redemption
will be February 17, 2015. After giving effect to a dividend of
$22.50 per share on the Preferred Stock to be paid on the same
date, the redemption price per share will be $1,000. The record
date for the redemption and the dividend is January 6, 2015. The
Preferred Stock was originally issued by HMN to the U.S. Treasury
through the Capital Purchase Program established under the Troubled
Asset Relief Program.
The Preferred Stock redemption is being funded through a $10
million term loan that will be evidenced by a promissory note. The
principal balance of the note will bear interest at a rate of 6.5%
and will be payable in consecutive annual installments of $1
million on each December 15, beginning December 15, 2015, with the
balance due on December 15, 2021. The Preferred Stock dividend is
being funded through internally available funds. HMN has requested
and received all applicable approvals from regulatory authorities
to pay the Preferred Stock dividend and effect the Preferred Stock
redemption.
"I am pleased to report the dividend payment and redemption of
the final $10 million of our outstanding Preferred Stock
obligation, which follows the $16 million in redemptions that were
made in 2014," said Brad Krehbiel, President and CEO of
HMN. "With this payment, HMN will have repaid 100% of the
Preferred Stock issued through the U.S. Treasury Capital Purchase
Program. We look forward to enjoying the benefits of the
reduced Preferred Stock dividend amounts in future
periods."
General Information
HMN Financial, Inc. and the Bank are headquartered in Rochester,
Minnesota. Home Federal Savings Bank operates eight full service
offices in Minnesota located in Albert Lea, Austin, Eagan, La
Crescent, Rochester (2), Spring Valley and Winona; one full service
office in Marshalltown, Iowa; two loan origination offices located
in Wauwatosa, Wisconsin and in Sartell, Minnesota; and two Private
Banking offices in Rochester, Minnesota.
Safe Harbor Statement
This press release may contain forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These statements are often
identified by such forward-looking terminology as "expect,"
"intend," "look," "believe," "anticipate," "estimate," "project,"
"seek," "may," "will," "would," "could," "should," "trend,"
"target," and "goal" or similar statements or variations of such
terms and include, but are not limited to, those relating to
increasing our core deposit relationships, improving credit
quality, reducing non-performing assets, reducing expense and
generating improved financial results; the adequacy and amount of
available liquidity and capital resources to the Bank; the
Company's liquidity and capital requirements; our expectations for
core capital and our strategies and potential strategies for
improvement thereof; changes in the size of the Bank's loan
portfolio; the amount of the Bank's non-performing assets and the
appropriateness of the allowance therefor; future losses on
non-performing assets; the amount and mix of interest-earning
assets; the amount and mix of brokered and other deposits; the
availability of alternate funding sources; the payment of dividends
by HMN, including Preferred Stock dividends; the future outlook for
the Company; the amount of deposits that will be withdrawn from
checking and money market accounts and how the withdrawn deposits
will be replaced; the projected changes in net interest income
based on rate shocks; the range that interest rates may fluctuate
over the next twelve months; the net market risk of interest rate
shocks; the future outlook for the issuer trust preferred
securities held by the Bank; the ability of the Bank to pay
dividends to HMN; redemption of the outstanding Preferred Stock;
the ability of HMN to repay the loan from Project Hawkeye, L.L.C.;
the ability to remain well capitalized under revised capital rules;
the expected impact of new Basel III and the Dodd Frank Act capital
standards on the Bank's and the Company's capital positions; and
compliance by the Company and the Bank with regulatory standards
generally (including the Bank's status as "well-capitalized") and
other supervisory directives or requirements to which the Company
or the Bank are or may become expressly subject, specifically, and
possible responses of the Office of the Comptroller of the Currency
(OCC), Federal Reserve Bank (FRB), the Bank, and the Company to any
failure to comply with any such regulatory standard, directive or
requirement.
A number of factors could cause actual results to differ
materially from the Company's assumptions and expectations. These
include but are not limited to the adequacy and marketability of
real estate and other collateral securing loans to borrowers;
federal and state regulation and enforcement; possible legislative
and regulatory changes, including changes to regulatory capital
rules; the ability of the Bank to comply with other applicable
regulatory capital requirements; enforcement activity of the OCC
and FRB in the event of our non-compliance with any applicable
regulatory standard or requirement; adverse economic, business and
competitive developments such as shrinking interest margins,
reduced collateral values, deposit outflows, changes in credit or
other risks posed by the Company's loan and investment portfolios,
changes in costs associated with alternate funding sources,
including changes in collateral advance rates and policies of the
Federal Home Loan Bank, technological, computer-related or
operational difficulties, results of litigation, and reduced demand
for financial services and loan products; changes in accounting
policies and guidelines, or monetary and fiscal policies of the
federal government or tax laws; international economic
developments; the Company's access to and adverse changes in
securities markets; the market for credit related assets; the
future operating results, financial condition, cash flow
requirements and capital spending priorities of the Company and the
Bank; the availability of internal and, as required, external
sources of funding; or other significant uncertainties. Additional
factors that may cause actual results to differ from the Company's
assumptions and expectations include those set forth in the
Company's most recent filings on Forms 10-K and 10-Q with the
Securities and Exchange Commission. All forward-looking statements
are qualified by, and should be considered in conjunction with,
such cautionary statements. For additional discussion of the risks
and uncertainties applicable to the Company, see the "Risk Factors"
sections of the Company's Annual Report on Form 10-K for the year
ended December 31, 2013 and Part II, Item 1A of its subsequently
filed Quarterly Reports on Form 10-Q.
All statements in this press release, including forward-looking
statements, speak only as of the date they are made, and we
undertake no duty to update any of the forward-looking statements
after the date of this press release.
CONTACT: Bradley Krehbiel
President and Chief Executive Officer
HMN Financial, Inc. (507) 252-7169
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