Published:
HopFed Bancorp, Inc. Receives Preliminary Approval to Participate in Treasury Capital Purchase Program
HOPKINSVILLE, Ky., Nov. 20 /PRNewswire-FirstCall/ -- HopFed Bancorp, Inc.
(Nasdaq: HFBC) today announced that it has been selected and preliminarily
approved to participate inthe United States Department of Treasury Capital
Purchase Program (TARP). The Company is examining the details of the program
and has thirty days to make a decision on its participation in the program.
HopFed Bancorp is eligible to receive a Treasury Department investment in the
Company's preferred stock of up to $18.4 million. The senior preferred stock
would have a per annum dividend rate of 5.00% for the first five years and
9.00% thereafter. The Company would also issue the Treasury Department 10
year warrants for common stock equal to 15% of the Treasury's preferred stock
investment, giving the Treasury the opportunity to benefit from any increase
in the Company's stock price.
On October 20, 2008, Treasury Secretary Robert Paulson announced the
voluntary program by stating: "This program is designed to attract broad
participation by healthy institutions and to do so in a way that attracts
private capital to them as well." As part of the $700 billion financial
stimulus plan passed last month, the government invested $125 billion through
preferred stock purchases of nine large financial institutions. Another $125
billion is now being made available to regional and community banks that are
deemed to be "healthy institutions" by the Treasury Department.
John E. Peck, President and Chief Executive Officer, commented, "We are
pleased to have been selected to participate in this program implemented for
healthy financial institutions and fully support the plan and its efforts to
stabilize the credit markets and strengthen the economy. Potential
participation in the Treasury Capital Purchase Program is expected to enhance
the Company's lending and investment opportunities as well as providing
capital to expand into new markets and to fund strategic acquisitions.
"If completed, the sale of preferred stock to the United States Treasury
would increase the Tier 1 Capital Ratio of Heritage Bank from 7.25% to
approximately 9.10%. The Bank's total risk based capital ratio would increase
from 10.80% to approximately 13.70%," stated Mr. Peck.
HopFed Bancorp, Inc. is a holding company of Heritage Bank headquartered
inHopkinsville, Kentucky. The Bank has eighteen offices in westernKentucky
and middleTennessee as well as Fall & Fall Insurance ofFulton, Kentucky,
Heritage Solutions ofMurray, Kentucky,Hopkinsville, Kentucky,Dickson,
Tennessee, andPleasant View, Tennessee and Heritage Mortgage Services of
Clarksville, Tennessee. The Bank offers a broad line of banking and financial
products and services with the personalized focus of a community banking
organization. For more information about Heritage Bank and HopFed Bancorp,
Inc., go to our website at http://www.bankwithheritage.com.
Information contained in this press release, other than historical
information, may be considered forward-looking in nature and is subject to
various risks, uncertainties, and assumptions. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated,
estimated or expected. Among the key factors that may have a direct bearing
on the Company's operating results, performance or financial condition are
competition and the demand for the Company's products and services, and other
factors as set forth in filings with the Securities and Exchange Commission.
SOURCE HopFed Bancorp, Inc.
Copyright © 2009, PRNewswire
Copyright © 2009, NewsBlaze,
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