Unity Bancorp, the parent company of Clinton, N.J.-based Unity bank, which has branches in Northampton County, has received approval from the U.S. Treasury to redeem the remaining portion of its Troubled Asset Recovery Program preferred stock.
The company said that on July 3 it will repay $10.4 million to the Treasury to repurchase 10,325 shares of the preferred stock, including accrued and unpaid dividends for the shares.
“We entered into the program in December 2008 in order to strengthen our financial position during challenging economic times,” said James A. Hughes, president and CEO. “The funds were used to support loan growth in the markets we serve. As our asset quality and earnings have improved, we believe it is time to redeem these shares.”
Since receiving the TARP investment, Unity has paid the U.S. Treasury approximately $4.5 million in preferred stock dividends, he said.
As part of the transaction, the company issued warrants to the Treasury to purchase 764,778 shares of common stock at $4.05 per share.
The warrants are still held by the Treasury and remain outstanding. Unity said it intends to attempt to negotiate for the repurchase of the warrants; however, the repurchase price is subject to negotiations and there is no assurance that the warrants will be repurchased.