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Central Valley Community Bancorp Message Board

  • sambordulac sambordulac Jan 16, 2010 1:10 PM Flag

    the preferred

    The preferred pays 10% and adjust upwards later. I hope this is the insiders' scheme to line their pockets.If so, the abuse is abhor. Otherwise, the bank had to be in serious trouble. All sign indicated that this is not the case.

    Why the bank need the money is also mysterious.

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    • One of the possible use of money is to pay TARP off. But TARP only cost 5%, way cheaper then the preferred.
      The only way I can possibly justify it is an attractive acquisition. We shall see.

      On this recap deal, we are certain that the new investors are confident that $5.25 is cheap. I am further relieved that CVCY is going to be on sound footing.

      • 1 Reply to sambordulac
      • Tiny part of the mystery:
        << On January 19, 2010, Central Valley Community Bancorp (Company) received confirmation from the U. S. Treasury (Treasury) of the reduction in the number of shares of Common Stock issuable upon the exercise of a Warrant issued to the Treasury (Warrant). The Warrant was issued in connection with a Letter Agreement (Agreement), entered into on January 30, 2009, between the Company and the Treasury whereby the Company issued to the Treasury a Warrant to purchase 158,133 shares of the Company’s common stock, no par value. After the adjustment, the number of shares of Common Stock issuable pursuant to the Treasury’s exercise of the Warrant was reduced to 79,067.
        According to the Agreement, if the Company received aggregate gross cash proceeds of not less than $7,000,000 for a Qualified Equity Offering on or prior to December 31, 2009, the number of shares of Common Stock issuable upon the exercise of the Warrant could be reduced by one half of the original number of shares. The Company raised $8,000,000 in a Qualified Equity Offering on December 23, 2009 and exercised its option to cancel one half of the Common Stock issuable under the Warrants. >>

        However, for every $100 in new capital it issued 16 new shares at 13% discount to tangible book value, but only get's to reduce one warrant.

        I am no closer in solving this mystery.

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