Community Bank of the Bay has raised $1.75 million in new capital as a participant in the US Department of the Treasury’s troubled assets relief programme, capital repurchase programme (CPP).
The U.S. Treasury’s capital purchase programme is a voluntary programme designed to assist healthy institutions build their capital positions to support the U.S. economy by increasing the flow of financing to the U.S. businesses and consumers.
Under the programme, senior preferred stock is issued to the U.S. Department of Treasury. The preferred stock will pay a dividend for the first five years, after which the rate will increase to 9% if the preferred shares are not redeemed by the company. Because Community Bank of the Bay is a designated community development financial institution, no warrants as with other banks, is required.
Brian Garrett, president and CEO of Community Bank of the Bay, said: This capital infusion will provide the expanded capital base for us to increase our ability to meet the needs of our customers and the communities we serve. Additionally we believe our shareholders will benefit from this additional capital which further enhances our already well-capitalised position and allow us to expand our market share in a sound manner.
