BEAUFORT, S.C., Feb. 19, 2013 (GLOBE NEWSWIRE) -- Coastal Banking Company Inc. (OTCQB:CBCO), the holding company of CBC National Bank, which operates branches in Beaufort and Port Royal, S.C., Fernandina Beach, Fla., and Meigs, Ga., today reported that on Feb. 15, 2013, it paid the U.S. Treasury $430,757 on its Fixed Rate Cumulative Perpetual Preferred Stock, Series A ("TARP Preferred"), covering the current dividend due Feb. 15, 2013, the deferred dividends due Feb. 15, 2011, and May 15, 2011, as well as accrued interest payable through Feb. 15, 2013, on all previously deferred TARP dividends. The company also has recently paid all previously deferred interest payments on its Trust Preferred securities.
"We're pleased to once again be in the position to make dividend payments on our TARP holdings as well as interest payments on our Trust Preferred securities," said Michael G. Sanchez, chief executive officer. "The Federal Reserve Bank of Richmond (the "FRB") recently issued its non-objection to the payment of three TARP dividends, thanks in part to our capital strength, consistent earnings and improved asset quality. This has provided us the opportunity to reduce our outstanding deferred TARP dividend obligation. We remain under a memorandum of understanding (MOU) with the FRB, and so we must continue to request consent from the FRB each quarter to continue to make our TARP dividend payments and Trust Preferred interest payments in the future. If we are successful in our efforts to sustain recent trends in earnings and asset quality improvements in 2013, we intend to seek consent from the FRB each quarter to pay current and deferred TARP dividends, as well as currently due interest on our Trust Preferred securities. While we are hopeful that these future requests will be viewed favorably by the FRB, there is no assurance that we will continue to receive the required regulatory consent or non objection to such future payments."
Coastal Banking Company has been under an MOU with the FRB since November 2010, which requires the company to request consent or non-objection from the FRB prior to the payment of dividends on its TARP Preferred or interest on its Trust Preferred securities. The Company has been deferring TARP Preferred dividends since Feb. 15, 2011, and has deferred interest payments on its Trust Preferred securities since December 2010.
On Dec. 4, 2012, the FRB issued a non-objection to the Company paying current quarterly Trust Preferred interest payments as well as all accrued interest on Trust Preferred securities. The Company subsequently made those interest payments and has brought all interest on Trust Preferred securities current as of Jan. 23, 2013.
On Feb. 1, 2013, the FRB issued a non-objection to the Company paying three TARP Preferred dividend payments, accrued interest on all deferred TARP Preferred dividend payments, and the next quarterly interest payments due on Trust Preferred securities.
Coastal Banking Company received a $500,000 dividend on Feb. 7, 2013, from its banking subsidiary, CBC National Bank, representing the first such dividend paid by the bank to the holding company since 2008. On Feb. 12, 2013, the Company's board of directors declared a dividend of $43.29 per share on its TARP Preferred stock payable on Feb. 15, 2013 to holders of record on Feb. 5, 2013.
Having completed these payments of TARP Preferred dividends, the company now has six remaining TARP Preferred dividend payments in deferral. The company will continue to seek consent or non-objection from the FRB each quarter to pay three TARP Preferred dividends – including one current and two deferred payments – along with accrued interest payable, in addition to the regular quarterly interest due on its Trust Preferred securities, as long as the MOU remains in force and to the extent that the Company's operating results support continued payment of these dividends and interest.
About Coastal Banking Company Inc.
Coastal Banking Company Inc., is the $424.9 million-asset bank holding company of CBC National Bank, headquartered in Fernandina Beach, Fla., which provides a full range of consumer and business banking services through full-service banking offices in Beaufort, S.C., Fernandina Beach, Meigs, Ga., and Port Royal, S.C., and commercial loan production offices in Jacksonville, Fla., and Savannah, Ga. The Company's residential mortgage banking division, headquartered in Atlanta, includes an Internet-based retail mortgage operation as well as a National Retail Group that has lending offices in Florida, Georgia, Maryland, New York and Ohio. The Company's Small Business Administration lending division originates SBA loans primarily in Jacksonville and Vero Beach, Fla., Atlanta, and Beaufort. The Company's common stock is publicly traded on the OTCQB Markets under the symbol CBCO. A current CBCO stock price quote and recent stock trading activity is available at http://www.otcmarkets.com/stock/CBCO/quote.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK FACTORS
This release contains forward-looking statements including statements relating to present or future trends or factors generally affecting the banking industry and specifically affecting Coastal's operations, markets and products. Without limiting the foregoing, the words "believes," "anticipates," "intends," "expects," or similar expressions are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected for many reasons, including, without limitation, changing events and trends that have influenced Coastal's assumptions, but that are beyond Coastal's control. These trends and events include (i) changes in the interest rate environment which may reduce margins, (ii) not achieving expected growth, (iii) less favorable than anticipated changes in the national and local business environments and securities markets, (iv) adverse changes in the regulatory requirements affecting Coastal, (v) greater competitive pressures among financial institutions in Coastal's markets, (vi) greater loan losses than historic levels, and (vii) difficulties in expanding our banking operations into a new geographic market.
All written or oral forward-looking statements are expressly qualified in their entirety by these cautionary statements. Coastal Banking Company, Inc. undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.