April 8, 2013
Financial Inc., the holding company of MutualBank, announced today that the Company has redeemed 7,231 shares, or 25%, of the preferred stock that the Company issued to the Secretary of the Treasury ("Secretary") under the Small Business Lending Fund program ("SBLF"). The shares were redeemed at their liquidation value of
per share plus accrued dividends for a total of
The redemption was approved by the Company's primary regulator and was funded with a dividend from MutualBank. After this partial redemption, the Company and MutualBank continued to have capital significantly in excess of minimum regulatory requirements and at levels necessary to be deemed well-capitalized under applicable regulatory standards.
"We were pleased to have been approved by Treasury to participate in the SBLF," stated
David W. Heeter
, President and Chief Executive Officer of the Company. Mr. Heeter added, "Our participation in the SBLF was advantageous to the Company, particularly as we emerged from the recession with improved earnings and asset quality in 2012. This redemption does not reflect any change in our commitment to small business lending in our market areas."
"This partial redemption of our SBLF preferred shares is an important part of the Company's long-term capital strategy and will reduce our annual SBLF dividends by
(based on the current 5% dividend rate), thereby increasing fully diluted EPS by
per share on an annual basis," stated
, Senior Vice President and Chief Financial Officer.
Dividends on the remaining 21,692 shares of SBLF preferred stock are currently 5%. The dividend rate may increase to 7% in 2014. Mr. Heeter stated, "Our board of directors will review the Company's capital levels annually to consider when additional SBLF redemptions are warranted." All future SBLF redemptions are subject to the approval of the Company's primary regulator.