National Mercantile Bancorp Completes an Equity Placement and Interest Rate Swap.Business Editors LOS ANGELES--(BUSINESS WIRE)--Jan. 3, 2003 National Mercantile Bancorp (the "Company")(Nasdaq:MBLA MBLA Macedonian Business Lawyers Association MBLA Multi-Beam Laser Altimeter MBLA Man Boy Love Association (usually seen as NAMBLA) MBLA Massachusetts Black Lawyers Association MBLA Mortgage Broker License Act - Common Stock)(Nasdaq:MBLAP - Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. ), today announced that it has completed a private placement of 1,006,287 shares of its common stock at a price of $7.65 per share to accredited to attribute something to him; as, Mr. Clay was accredited with these views; they accredit him with a wise saying s>. See also: Accredit investors. The aggregate proceeds from the private placement were $7.7 million. The Company plans to use the proceeds from the placement to redeem the convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". of its South Bay Bank subsidiary of $2.5 million and general corporate purposes, including investments in its subsidiaries. Wedbush Morgan Securities served as financial advisor to National Mercantile Bancorp. The repayment of the convertible preferred stock eliminates an annual dividend expense of approximately $212,000. In addition, as the preferred was convertible into shares of common stock, it reduces, by approximately 750,000 shares, the number of diluted shares outstanding. The interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. relates to $15.0 million of trust preferred securities issued in conjunction with the acquisition of South Bay Bank, N.A. The swap has the effect of reducing the 10.25% fixed rate of interest to a floating rate at 6 month libor, plus 458 basis points. The initial rate, effective January 6, 2003, is 5.98%. As a result, it is projected that the interest expense on the trust preferred securities, during the first year, will decrease by approximately $600,000. Furthermore, the swap should be beneficial in future periods as the interest expense will be more closely aligned with fluctuations in market rates. "Both transactions, through the redemption of the subsidiary preferred stock and the interest rate swap, are expected to improve the Company's earnings per share as well as aggregate net income," said Scott A. Montgomery, President and Chief Executive Officer. "Additionally, this will allow us to more aggressively pursue opportunities that we believe will drive our growth and profitability." The securities sold in this private placement have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the absence of an effective registration statement or exemption from registration requirements. National Mercantile Bancorp is the holding company for Mercantile National Bank and South Bay Bank, N.A., members FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). , with locations in Encino, Century City, El Segundo El Segundo (ĕl sēgŭn`dō), industrial city (1990 pop. 15,223), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1917. Its products include navigation and computer systems, aircraft parts, office machines, telephone apparatus, and and Torrance, California. The banks offer a wide range of financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. to the real estate and real estate construction markets, the entertainment industry, the professional, healthcare and executive markets, community-based non-profit organizations, escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. companies and business banking. This press release contains statements which constitute forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risk and uncertainties. Actual results may differ materially from the results in these forward looking statements. Factors that might cause such a difference include, among other things, fluctuations in interest rates, changes in economic conditions or governmental regulation, credit quality and other factors discussed in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2001. "Redefining Business Banking" |
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