Note 7 - Shareholders' Equity

6 Months Ended

Jun. 30, 2012

Stockholders' Equity Note Disclosure [Text Block]

7.     SHAREHOLDERS’ EQUITY

New Capital Raised

On May 21, 2012, the Company closed the public offering of 5,111,750 shares of its common stock, $1.00 par value per share (the “Offering”), at a price of $9.00 per share. The shares sold in the Offering included 666,750 shares sold pursuant to the underwriter’s full exercise of its option to purchase additional shares to cover over-allotments. The shares were sold in accordance with an underwriting agreement between the Company and Keefe, Bruyette & Woods, Inc., the sole underwriter.

Proceeds to the Company, after deducting the underwriting discount,commissions and Offering expenses, were approximately $42.9 million.

The Offering was made pursuant to a registration statement on Form S-3 (File No. 333-180889) of the Company, which became effective on May 7, 2012. A prospectus supplement, dated May 16, 2012, to the base prospectus, dated May 7, 2012, forming a part of the registration statement was filed on May 17, 2012 with the Securities and Exchange Commission under Rule 424(b)(2) of the Securities Act of 1933, as amended.

Repurchase of Troubled Asset Relief Program (“TARP”) Preferred Stock

The Company repurchased 43,740 shares of the Company’s 45,000 outstanding shares of preferred stock (“Preferred Stock”) from the U.S. Department of the Treasury (“Treasury”), which were issued to the Treasury in connection with the Company’s participation in the TARP Capital Purchase Program (“CPP”).  The repurchase of $43.7 million in stated value of Preferred Stock at a discount of 1.883% (or an actual cost of $42.9 million) resulted in a one-time adjustment, net of settlement costs, to capital totaling $706,000 offset by the amortization of $249,000 in the Preferred Stock discount.  Although the transaction date occurred during the second quarter of 2012, actual payment for the repurchase of Preferred Stock took place on July 3, 2012.  As such, the Company recorded a payable in the amount of $42.9 million listed as “Preferred Stock repurchase payable” on the Consolidated Balance Sheet as of June 30, 2012.  The remaining 1,260 shares of Preferred Stock were sold by the Treasury to other investors.  The warrants to purchase common stock associated with the TARP program are still held by the Treasury.

As a result of participation in the CPP, among other things, the Company was subject to the Treasury’s standards for executive compensation and corporate governance for the period during which the Treasury held the Company’s Preferred Stock, including the second quarter of 2012.  These standards were most recently set forth in the Interim Final Rule on TARP Standards for Compensation and Corporate Governance, published June 15, 2009.  Because the Treasury sold all of the Preferred Stock in the auction, these executive compensation and corporate governance standards are no longer applicable to the Company on a going forward basis.

The Company paid no common dividends for the six months ended June 30, 2012 and 2011.  Preferred dividends of $1.1 million were paid for each of the six months ended June 30, 2012 and 2011.