Cathay General Bancorp announced late Monday it had redeemed the last of the preferred stock it issued to the U.S. Treasury under the Troubled Asset Relief Program Capital Purchase Program during the financial crisis.
The Treasury made $250 billion in TARP funds available to U.S. financial institutions through purchases of the banks’ preferred stock. Cathay, the Chinatown holding company for Cathay Bank, sold $258 million worth of preferred shares in December 2008, and redeemed about half of them in March.
The bank said it redeemed 129,000 remaining shares of the Series B preferred stock for $129 million, plus accrued and unpaid dividends. Chief Financial Officer Heng W. Chen said the bank is in discussions with the Treasury about buying back warrants that were part of the deal, and worth a couple million dollars.
“This redemption marks a key milestone in our progress,” Chief Executive Dunson Cheng said in a statement. “We have now completed repayment of our TARP obligation, which provided us with extra capital as protection against the impact of the economic downturn.”
The announcement was made after the markets closed Monday, Cathay shares earlier closed up 24 cents, or 1 percent, to $23.37 on the Nasdaq.