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LNB Bancorp in Lorain, Ohio, has retired a large chunk of its bailout money by offering its owners common stock.
March 19 -
LNB Bancorp in Lorain, Ohio, is inching its way toward exiting the Troubled Asset Relief Program.
December 26 -
Many community banks could find themselves in the same dilemma as LNB in Ohio, which is weighing the pleas of activist shareholder Umberto Fedeli to repurchase its Tarp shares from private investors. It has to choose between paying higher dividends or a costly capital raise.
October 11
LNB Bancorp (LNBB) in Lorain, Ohio, has sold $3.7 million of stock as part of a plan to exit the Troubled Asset Relief Program.
The $1.2 billion-asset company said Monday that it sold the stock through a private placement to directors and third-party investors. LNB sold about 367,000 shares, pricing the stock at $9.91 a share for the investors and $10.30 a share for the directors. LNB's stock closed Monday at $10.41 a share.
LNB plans to use the money, along with a $3 million line of credit from an unnamed financial institution, to buy back its remaining 9,147 shares of Tarp stock.
LNB received $25.2 million through Tarp in December 2008; the Treasury Department auctioned the shares last year for about $870 each. LNB has been
"We are excited that we are in the final steps of retiring the Series B preferred stock," LNB Chief Executive Daniel Klimas said in a press release. "When completed, we expect that these transactions will be accretive to both tangible book value per share and earnings per share."
LNB expects the buyback to reduce its 2014 dividend expenses by $777,500.
