Treasury to auction $219.27 million preferreds issued by seven banks

By Angela McDaniels

Tacoma, Wash., June 25 - The Department of the Treasury will sell its preferred stock positions in seven banks through registered public auctions, according to a Treasury news release.

The auctions were expected to begin Monday.

The Treasury bought the preferreds from the banks under the Capital Purchase Program of the Troubled Asset Relief Program.

According to filings with the Securities and Exchange Commissions, the auctions include

• $48.2 million of series A fixed-rate cumulative perpetual preferred stock issued by Fidelity Southern Corp. of Atlanta. The minimum bid price is $782.72 per preferred;

• $33 million of series A fixed-rate cumulative perpetual preferreds issued by Firstbank Corp. of Alma, Mich. The minimum bid price is $842.00 per preferred;

• $23.18 million of series A fixed-rate cumulative perpetual preferreds issued by First Citizens Banc Corp. of Sandusky, Ohio. The minimum bid price is $752.75 per preferred;

• $45 million of series A fixed-rate cumulative perpetual preferreds issued by MetroCorp Bancshares, Inc. of Houston. The minimum bid price is $946.00 per preferred;

• $20.05 million of series A fixed-rate cumulative perpetual preferreds issued by Peoples Bancorp of North Carolina, Inc. of Newton, N.C. The minimum bid price is $840.00 per preferred;

• $32.54 million of series A fixed-rate cumulative perpetual preferreds issued by Pulaski Financial Corp. of St. Louis. The minimum bid price is $739.25 per preferred; and

• $17.3 million of series A fixed-rate cumulative perpetual preferreds issued by Southern First Bancshares, Inc. of Greenville, S.C. The minimum bid price is $751.75 per preferred.

Terms of preferreds

The liquidation preference is $1,000 per preferred.

The dividend rate is initially 5%. It will increase to 9% on May 15, 2014 for the Southern First Bancshares preferreds and on Feb. 15, 2014 for the remaining preferreds.

The preferreds are callable at $1,000 each at any time subject to federal approval.

Auction procedures

The offerings are using a modified Dutch auction methodology that establishes a market price by allowing investors to submit bids at specified increments.

The minimum size for any bid is one preferred.

In each auction, if bids are received for 100% or more of the offered preferreds, the clearing price will be equal to the highest price at which all of the offered preferreds can be sold in that auction.

If bids are received for at least half but less than all of the offered preferreds, the clearing price will be equal to the minimum bid price for that auction.

If bids are received for less than half of the offered preferred, the Treasury will not sell any preferreds in that offering.

MetroCorp and Southern First Bancshares said they intend to submit one or more bids in their respective auctions, and First Citizens said some of its directors might bid.

Southern First Bancshares' bids cannot be for more than $1 million. First Citizens expects the total amount of bids made by its directors, if any, to be no more than $13 million.

Bank of America Merrill Lynch (dg.prospectus_requests@baml.com or 800 294-1322) and Sandler O'Neill + Partners, LP (syndicate@sandleroneill.com or 866 805-4128) are the auction agents and bookrunners.

The co-managers are Great Pacific Fixed Income Securities, Inc., Loop Capital Markets LLC and Samuel A. Ramirez & Co., Inc.

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