Peapack-Gladstone Financial Corporation to Redeem the Remaining Preferred Stock Issued Under U.S. Treasury's Capital Purchase Program
Peapack-Gladstone Financial Corporation (NASDAQ: PGC) announced today that it has received approval from the U.S. Treasury to redeem all of the remaining shares of preferred stock originally issued under Treasury's Capital Purchase Program. The Corporation expects to repay approximately $14.5 million to Treasury (including accrued and unpaid dividends of $112 thousand) on January 11, 2012. The Corporation's redemption of the shares is not subject to additional conditions or stipulations from Treasury.
Frank A. Kissel, Chairman and CEO, said, "We are extremely pleased to be able to redeem the remaining portion of the original CPP investment. When combining this redemption with our past two redemptions in 2010 and 2011, we will have repaid all of the original CPP investment completely from internally generated capital, without diluting existing shareholders. As I have said many times, this has always been our plan and we have been successful." Mr. Kissel also noted that the final redemption this year will save the Corporation approximately $720 thousand in dividend expense on an annual basis.
As a result of the repurchase, accrued and unpaid dividends of $112 thousand will be paid and the accretion related to the preferred stock will be accelerated and an approximate $362 thousand total accretion will be recorded. As a result of these two items, a $474 thousand reduction to retained earnings will be recorded during the first quarter of 2012.
In connection with the January 2009 original issuance of the preferred stock under Treasury's CPP program, the Corporation issued to Treasury a warrant to purchase 150,296 common shares at $28.63 per share (after adjusting for a 5% stock dividend issued August 3, 2009). This warrant is still held by Treasury and will remain outstanding at this time.
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