LORIS, S.C.–(GLOBE NEWSWIRE)–HCSB Financial Corporation (the “Company”) (OTCPK:HCFB) announced today that it closed its previously announced private placement of 359,468,443 shares of its common stock at $0.10 per share and 905,315.57 shares of its Series A preferred stock at $10.00 per share to Castle Creek Capital Partners VI, L.P. and certain other institutional and accredited investors for gross proceeds of approximately $45 million.
The Company utilized approximately $3 million of the gross proceeds from the private placement to repurchase all of its outstanding Series T preferred stock, trust preferred securities and subordinated debt notes, and approximately $38 million to recapitalize the Company’s wholly-owned bank subsidiary, Horry County State Bank, to support its operations and increase its capital ratios to levels in excess of required regulatory levels.
Jan H. Hollar was appointed as the chief executive officer and a director of the Company and the Bank effective as of the closing of the private placement. Ms. Hollar commented, “I am personally honored to be leading this Company at this pivotal point in time. I have had the privilege of working with HCSB in a consultant role over the past year and a half. During that time, I have come to deeply respect this Company and what it stands for. I intend to build upon the deep history and solid relationships we have throughout the markets we serve.”
Michael S. Addy, Chairman of the Board of the Company, added: “The private placement and subsequent resolution of the Company’s outstanding preferred stock, trust preferred securities and subordinated debt represent a tremendous accomplishment following many long hours of work by our employees, management, the Board and our outside partners. I believe today is a turning point for our Company as we bring in a seasoned and experienced management team to lead the Bank forward with purpose and vision. Although HCSB, like many financial institutions, has suffered several setbacks as a result of the recent economic turmoil, I believe we have now overcome these obstacles and can move ahead with a well-capitalized balance sheet and a return to responsible lending. I deeply appreciate the support of our employees, my fellow Board members and, most importantly, our customers and community supporters.”