Northwest Bancorp. (NBCT) in Spokane, Wash., has raised $12.5 million after selling common stock and issuing subordinated notes and warrants.
The $392 million-asset company said late Wednesday that it sold 1 million shares of common stock to accredited investors for $6.5 million, or $6.50 a share. Northwest raised another $6 million by issuing unsecured subordinated notes and warrants to Harlan Douglass, one of its directors, and Community BanCapital.
Northwest said it plans to use the proceeds, along with dividends from its bank, to redeem preferred stock tied to the Troubled Asset Relief Program. The Treasury Department auctioned the shares to private investors earlier this year. Any remaining proceeds will be used to support asset growth and for general corporate purposes.
The warrants purchased by Douglass and Community BanCapital allow the investors to buy 200,000 shares of common stock at an exercise price of $7.25 a share. The warrants cannot be exercised for a year, unless there is a change in control of the company, and they will expire in nine years.
The company had to turn away investors, who put in requests for nearly 1.3 million shares of common stock, Randall Fewel, Northwest's president and chief executive, said in a press release. "We believe the successful completion of these capital offerings is an important step for the company, providing us additional capital resources to continue our growth and giving us the ability to" redeem the preferred stock before the dividend rate rises to 9% in February, he said.
"I believe that the company has a bright future ahead of it," Fewell added. "Significant disruption is occurring within the company's market area from recently announced mergers, and I believe this creates an opportunity to attract both customers and talented banking personnel to support loan and deposit growth for the bank."
Northwest did not use an underwriter for the offerings, though D.A. Davidson and McAdams Wright Ragen served as financial advisors. Witherspoon Kelley was the legal counsel.
