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MAGNA COMPLETES COMMON STOCK OFFERING; UNDERWRITERS EXERCISE OVER-ALLOTMENT OPTION; MAGNA FULLY PREPAYS $41 MILLION TERM LOAN

 MAGNA COMPLETES COMMON STOCK OFFERING; UNDERWRITERS EXERCISE
 OVER-ALLOTMENT OPTION; MAGNA FULLY PREPAYS $41 MILLION TERM LOAN
 ST. LOUIS, Aug. 17 /PRNewswire/ -- Magna Group, Inc. (NASDAQ-NMS: MAGI), a St. Louis based multibank holding company, announced that it has completed a primary public offering of 4.6 million shares of common stock at $13.50 per share, including 600,000 shares issued to cover over-allotments. Donaldson, Lufkin & Jenrette Securities Corporation managed the offering. Net proceeds to the company were $59.8 million, of which $41 million were used to prepay the outstanding balance of a floating-rate term loan. The remaining proceeds will be used for general corporate purposes.
 The prepayment of the term loan will result in the elimination of anticipated interest expense of approximately $329,000 during the third quarter of 1992 and $618,000 in subsequent quarters based on the current prime rate of 6 percent. The remaining proceeds will be invested in short-term obligations with an anticipated income effect of approximately $86,000 in the third quarter of 1992 and $161,000 in subsequent quarters based on an assumed yield of 3.5 percent. Magna will also incur, in the third quarter, an extraordinary charge to income of $1,259,000, or $831,000 after-tax, related to the elimination of unamortized debt issuance cost and the effect of marking to market a fixed-rate interest swap matched with the debt that was extinguished.
 The net effect of these adjustments, and the anticipated increase in interest income and decrease in interest expense, will reduce net income by approximately $552,000 after-tax, or 3 cents per share, in the third quarter, and will increase net income by approximately $521,000 after-tax, or 2 cents per share, in the fourth and subsequent quarters.
 William S. Badgley, chairman of the board and chief executive officer, stated, "We are very pleased with the market acceptance of the offering and the fact that the over-allotment option was exercised in full. With the stock offering completed, Magna returns to its historically strong capital levels, with our capital ratios well above peer group averages."
 Magna's pro forma June 30, 1992 total risk-based capital ratio of 12.88 percent compares with 11.97 percent for its peer group. Magna's pro forma leverage capital ratio of 7.74 percent compares with 6.63 percent for its peer group. The peer group data is the average for bank holding companies with assets between $3 billion and $10 billion, as published by the Federal Reserve as of March 31, 1992.
 Magna Group, Inc., a $3.7 billion multibank holding company, operates 87 community banking locations in Illinois and Missouri and is the third-largest bank holding company based in St. Louis. Within the St. Louis metropolitan area, Magna has 62 offices with approximately $2.8 billion in assets. Magna's 11 locations in Southern Missouri and Kansas City, Mo. are reported as net assets held for sale.
 -0- 8/17/92
 /CONTACT: George Klann, 314-963-3010, Paul Gerson, 314-963-2508, or Mary Scholz, 314-963-2545, all of Magna/
 (MAGI) CO: Magna Group, Inc. ST: Missouri IN: FIN SU: OFR


TS -- NY024 -- 0414 08/17/92 10:14 EDT
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Publication:PR Newswire
Date:Aug 17, 1992
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