Center Bancorp Repurchases the Warrants Issued Under TARP Capital Purchase Program
Center Bancorp, Inc. (Nasdaq: CNBC), parent company to Union Center National Bank, of Union, New Jersey, announced today that on December 7, 2011 it repurchased the warrants issued on January 12, 2009 to the U.S. Treasury as part of its participation in the U.S. Treasury's TARP Capital Purchase Program. CNBC received $10.0 million under the program and repaid the debt in full in September of this year. In the repurchase, CNBC paid the U.S. Treasury $245,000 for the warrants.
As a result of a successful completion of the Company's rights offering in October 2009, the number of shares underlying the warrants held by the U.S. Treasury under the TARP Capital Purchase Program was reduced to 86,705 shares, or 50 percent of the original 173,410 shares. The warrants had an exercise price of $8.65 per share.
The preferred stock issued under the TARP Capital Purchase Program was issued at a discount and the repurchase of the warrants will accelerate the accretion of the discount. This will result in a one-time non-cash reduction in net income available to common shareholders of about $225,000, or $0.014 cents per common diluted share, for the fourth quarter of 2011.
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