A Texas-based bank plans to sell stock through an initial public offering and use some of the proceeds to pay back $87.6 million it received as part of the federal bailout program.
Plains Capital Corp. said it expected to raise $140 million from the IPO. Of that, it intends to use $92 million to redeem preferred shares it gave the Treasury Department in exchange for aid under the Troubled Asset Relied Program.
In addition, the bank said it would pay off $20 million in debt, and would hold open the option of pursuing "other distressed sale opportunities to acquire assets that complement our existing
operations on a cost-effective basis."
Despite signing up for the bailout program, Plains Capital is seen as thriving by banking experts, with $4.4 billion in assets and $2.9 billion in deposits.It also owns a mortgage lending company and an investment advisory firm.
The bank's willingness to pursue an IPO in the current economic environment is a further sign of strength.
"If they had any hesitation, if they saw their asset quality was deteriorating or any sign their bank was going to go through tough times, they wouldn't have done this," Dan Bass, an investment banker with Houston-based Carson Medlin Co. told the Dallas Morning News.
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