Site search
sponsored by
News
ENLARGE
Two banks, each with ties to Roseburg, were involved in raising capital last week.
PremierWest Bancorp, the parent company of PremierWest Bank, announced Feb. 1 that its shareholders as of Dec. 15 were being offered the opportunity to purchase 3.3 shares of common stock per common stock held as of that day. Shares are being offered at 44 cents each. Net proceeds will be used principally to enhance the bank's regulatory capital position.
Roseburg-based Umpqua Bank announced Tuesday its intention to raise $215 million from investors. The money is to be used to repay the U.S. Treasury the $214 million it received for loan use through the Capital Purchase Program in 2008.
Jim Ford, president and CEO of Medford-based PremierWest Bank that has offices in Roseburg, explained that existing shareholders will have until 2 p.m. March 10 to purchase a pro rata share. A prospectus describing details of the share offer was mailed to shareholders last week. Shares not sold by March 10 will become available to shareholders who wish to exercise their over-subscription privilege.
Ford said that total proceeds from the offering, if fully subscribed, would be about $36 million.
Back in September, PremierWest fell below the “well capital” level, Ford said.
“That doesn't mean we're going out of business,” he said. “It's just an indication of need. The September earnings showed we had loans struggling on the balance sheet.”
The overall economic woes of the U.S. has resulted in many loan payments to banks being delinquent.
Ford said it'll probably take three to four weeks to get an indication of how many existing shareholders are interested in buying shares.
“We are being very, very prudent to raise capital in this manner in this environment,” Ford said. “In regards to the fear of people losing their money or life savings, with FDIC, people need to understand there's a 100 percent guarantee (of their money).
“We are heavily invested in Douglas County,” he added. “We have not folded up the tent and left the county. We plan to remain there and appreciate the loyalty our customers continue to show us.”
Umpqua Bank President and CEO Ray Davis said his bank's money-raising effort was successful with $303.6 million raised through the public offering of shares. He explained his staff spent a day talking to investors and taking orders. The purchasing was complete in about 24 hours.
“Yes, there's an element of dilution, but dilution is the least of anybody's concerns,” Davis said of the bank selling additional shares. “Raising capital the way we raised it is viewed as a very, very positive process.”
Davis said that the bank received $214 million through the Capital Purchase Program, but actually loaned out about eight times that amount ($1.7 billion in loan production) during 2009. That program was one of several bank assistance plans devised under the Treasury's Troubled Asset Relief Program.
But since 2008, regulations have been added and changed to the TARP money and there's the stigma of the money being a stimulus handout, Davis said.
“Umpqua Bank has never received a penny of government bailout money,” he said with emphasis. “All community banks that were viewed as being strong were still lumped in with the institutions that are in trouble. The reason we want to pay it ($214 million) back is that we want the stigma of the association that goes with it gone.”
Umpqua Bank has submitted a capital plan and is now awaiting the Treasury's approval to pay the money back.
“They need to see that once we pay back the money, we'll still be a very strong institution,” Davis said. “We fully anticipate getting approval in the next couple weeks and having the money paid back by the end of February.”
• News-Review reporter Craig Reed can be reached at 957-4210 or creed@nrtoday.com.
PremierWest Bancorp, the parent company of PremierWest Bank, announced Feb. 1 that its shareholders as of Dec. 15 were being offered the opportunity to purchase 3.3 shares of common stock per common stock held as of that day. Shares are being offered at 44 cents each. Net proceeds will be used principally to enhance the bank's regulatory capital position.
Roseburg-based Umpqua Bank announced Tuesday its intention to raise $215 million from investors. The money is to be used to repay the U.S. Treasury the $214 million it received for loan use through the Capital Purchase Program in 2008.
Jim Ford, president and CEO of Medford-based PremierWest Bank that has offices in Roseburg, explained that existing shareholders will have until 2 p.m. March 10 to purchase a pro rata share. A prospectus describing details of the share offer was mailed to shareholders last week. Shares not sold by March 10 will become available to shareholders who wish to exercise their over-subscription privilege.
Ford said that total proceeds from the offering, if fully subscribed, would be about $36 million.
Back in September, PremierWest fell below the “well capital” level, Ford said.
“That doesn't mean we're going out of business,” he said. “It's just an indication of need. The September earnings showed we had loans struggling on the balance sheet.”
The overall economic woes of the U.S. has resulted in many loan payments to banks being delinquent.
Ford said it'll probably take three to four weeks to get an indication of how many existing shareholders are interested in buying shares.
“We are being very, very prudent to raise capital in this manner in this environment,” Ford said. “In regards to the fear of people losing their money or life savings, with FDIC, people need to understand there's a 100 percent guarantee (of their money).
“We are heavily invested in Douglas County,” he added. “We have not folded up the tent and left the county. We plan to remain there and appreciate the loyalty our customers continue to show us.”
Umpqua Bank President and CEO Ray Davis said his bank's money-raising effort was successful with $303.6 million raised through the public offering of shares. He explained his staff spent a day talking to investors and taking orders. The purchasing was complete in about 24 hours.
“Yes, there's an element of dilution, but dilution is the least of anybody's concerns,” Davis said of the bank selling additional shares. “Raising capital the way we raised it is viewed as a very, very positive process.”
Davis said that the bank received $214 million through the Capital Purchase Program, but actually loaned out about eight times that amount ($1.7 billion in loan production) during 2009. That program was one of several bank assistance plans devised under the Treasury's Troubled Asset Relief Program.
But since 2008, regulations have been added and changed to the TARP money and there's the stigma of the money being a stimulus handout, Davis said.
“Umpqua Bank has never received a penny of government bailout money,” he said with emphasis. “All community banks that were viewed as being strong were still lumped in with the institutions that are in trouble. The reason we want to pay it ($214 million) back is that we want the stigma of the association that goes with it gone.”
Umpqua Bank has submitted a capital plan and is now awaiting the Treasury's approval to pay the money back.
“They need to see that once we pay back the money, we'll still be a very strong institution,” Davis said. “We fully anticipate getting approval in the next couple weeks and having the money paid back by the end of February.”
• News-Review reporter Craig Reed can be reached at 957-4210 or creed@nrtoday.com.
