NCAL Bancorp’s TARP perpetual preferreds to be repurchased, converted

By Susanna Moon

Chicago, Dec. 11 – NCAL Bancorp said all of its fixed-rate cumulative perpetual preferred stock, series A and series B issued under the U.S. Department of the Treasury’s TARP program will be converted to common stock as part of a recapitalization.

Alex Meruelo and the company’s current directors and officers purchased all outstanding shares of the preferreds from the Treasury for $3.9 million, including $1.8 million of funds from the current directors and officers.

Upon approval of the Federal Reserve Bank of San Francisco, the preferred shares will be converted at the $0.54705 price at which common shares were issued in the recapitalization into NCAL Bancorp common stock based on a total value of $3.9 million, according to a company press release.

When the preferred stock is converted, Meruelo’s ownership stake in NCAL will be reduced to about 80% of the outstanding common shares. Meruelo may also purchase another $10,219,000 common shares at the same per share price during the next 12 months in the second stage of the company recapitalization.

As part of the recapitalization, NCAL sold 19,890,322 shares of stock for $10,881,000, or $0.54705 per share, to Meruelo and the current directors and an officer of the company.

NCAL Bancorp is a Los Angeles-based holding company for National Bank of California.

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