Banner Corporation (NASDAQ:BANR), the parent company of Banner Bank and Islanders Bank, announced today that it intends to redeem the remaining 30,041 shares of its outstanding Fixed Rate Cumulative Perpetual Preferred Stock, Series A (Series A Preferred Stock) that were issued under the Troubled Asset Relief Program (TARP) Capital Purchase Program. The effective date for the planned redemption will be December 24, 2012. The shares are being redeemed from third-parties that purchased the Preferred Stock from the United States Department of the Treasury in a modified Dutch auction in March 2012.
The redemption price for shares of Banner Corporation’s Series A Preferred Stock will be the stated liquidation value of $1,000.00 per share, plus any accrued or unpaid dividends that have been earned thereon up to, but not including, the date of redemption. The Company anticipates the total cost of redeeming the remaining shares of Series A Preferred Stock will be approximately $30.2 million. The Company has received all necessary regulatory approvals to complete the planned redemption.
The Company previously repurchased from investors the other 93,959 shares of its Series A Preferred Shares at an average price of $973.70 per share, including 43,375 shares repurchased in the current quarter. Following the planned redemption on December 24, 2012, no shares of the Company's Series A Preferred Stock will remain outstanding.
"We are pleased to be able to announce this redemption," said Mark J. Grescovich, President and Chief Executive Officer. "We believe this final redemption is further indication of Banner’s continued operating improvement, financial strength and appropriate capital management. Our capital ratios following the redemption will continue to exceed the requirements of our regulators and the standards for well-capitalized banks. We are pleased with the work we have done to strengthen our asset quality metrics, operating results, and profitability trends so that we can comfortably redeem these preferred shares."