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Intervest Bancshares Corporation Announces Successful Bid For TARP Securities

Stocks in this article: IBCA

Intervest Bancshares Corporation (NASDAQ-GS: IBCA), the holding company for Intervest National Bank, announced today that it has been notified that it successfully bid for the purchase of 6,250 shares of its Series A Fixed Rate Cumulative Perpetual Preferred Stock (the “Preferred Stock”) held by the U.S. Department of the Treasury (“Treasury”). The Company issued 25,000 shares of Preferred Stock to the Treasury in December 2008 in connection with the Company’s participation in the Capital Purchase Program (the “CPP”) under the Treasury’s Troubled Asset Relief Program (“TARP”), together with a ten-year warrant (the “Warrant”) to purchase 691,882 shares of the Company’s common stock at an exercise price of $5.42 per share.

On June 6, 2013, the Treasury announced its intent to sell its investment in the Company’s Preferred Stock, along with similar investments the Treasury had made in five other financial institutions, primarily to qualified institutional buyers and certain institutional accredited investors. The Company sought and obtained regulatory approvals allowing it to participate in the auction. Using a modified Dutch auction methodology that established a market price by allowing investors to submit bids at specified increments during the period from June 10, 2013 through June 13, 2013, the Treasury auctioned all of the Company’s 25,000 shares of Preferred Stock. The remaining 18,750 shares of Preferred Stock are expected to be purchased by unrelated third parties. The closing price of the auctioned shares was $970.00 per share.

The Company purchased the Preferred Stock at a discount of 3.0% from the liquidation preference of the Preferred Stock, for a total purchase price of $6,062,500, plus an additional $1,227,500 in accrued and unpaid preferred dividends through the transaction’s expected settlement date of June 24, 2013. The Treasury continues to hold the Warrant. Going forward, the Company will benefit from the elimination of the annual Preferred Stock dividend of $312,500 with respect to the 6,250 shares to be purchased.

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