SOURCE: Centrue Financial Corporation

Centrue Financial Corporation

August 11, 2014 12:00 ET

Centrue Financial Corporation Announces Agreement for Proposed $75.0 Million Equity Recapitalization; Special Stockholder Meeting Scheduled

OTTAWA, IL--(Marketwired - Aug 11, 2014) - Centrue Financial Corporation (the "Company" or "Centrue") (OTCQB: CFCB) (PINKSHEETS: CFCB), parent company of Centrue Bank, announced today that it has entered into a stock purchase agreement with certain affiliates of Capital Z Partners III, L.P. ("Cap Z") as lead investor of a proposed capital raise of an aggregate $75 million, or 187,500,000 shares of common stock at a price of $0.40 per share. The agreement contemplates that Cap Z will own 24.0% of the Company's outstanding common stock after the transaction is complete. The securities issued in the recapitalization will not be registered under the Securities Act of 1933, as amended, or the securities laws of any state, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

"Our Board and management team had been actively pursuing capital alternatives to strengthen our capital position for some time, and we look forward to this new relationship with Capital Z," said President & CEO Kurt Stevenson on the announcement. "Upon completion of this transaction, we believe we will be better positioned to reinvest in our existing markets, enhance our current product and service offerings, and continue to build an experienced and impactful sales force. We are excited about the continuing evolution of our organization."

Completion of the transactions contemplated by the agreement is contingent on a number of conditions, including: an aggregate capital raise of at least $72 million, repurchase of the Company's Series C Preferred Stock, cancellation and settlement of warrants to purchase the Company's common stock held by the United States Department of Treasury, repayment or other settlement of the Company's existing subordinated debt facility, written evidence of the cure or waiver of any defaults in respect of the Company's trust preferred securities, federal and state regulatory approval and stockholder approval of the amendment to the Company's Certificate of Incorporation described below.

The Company has scheduled a special stockholders meeting for September 23, 2014, with a record date of August 4, 2014. At the special meeting, stockholders will be asked to approve an amendment to the Company's Certificate of Incorporation to (i) increase the number of common shares authorized from 15,000,000 to 215,000,000; (ii) reduce the par value per share of the Company's common stock from $1.00 to $0.01 and (iii) adopt certain restrictions on acquisitions and dispositions of securities to prevent an "ownership change" within the meaning of Section 382 of the Internal Revenue Code, as amended. The Company expects to mail proxy materials for the special meeting on or about August 15, 2014.

About the Company

Centrue Financial Corporation is a regional financial services company headquartered in Ottawa, Illinois and devotes special attention to personal service. The Company serves a market area which extends from the far western and southern suburbs of the Chicago metropolitan area across Central Illinois down to the metropolitan St. Louis area.

Further information about the Company is available at its website at http://www.centrue.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

This release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934 as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by the use of words such as "believe," "expect," "intend," "anticipate," "estimate," or "project" or similar expressions. The Company's ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and the subsidiaries include, but are not limited to, changes in: interest rates; general economic conditions; legislative/regulatory changes; monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality and composition of the loan or securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in the Company's market areas; the Company's implementation of new technologies; the Company's ability to develop and maintain secure and reliable electronic systems; and accounting principles, policies, and guidelines; and the Company's ability to satisfy the closing conditions to the completion of its proposed $75.0 million recapitalization. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Contact Information

  • Contacts:
    Kurt R. Stevenson
    Chief Executive Officer
    Centrue Financial Corporation
    Email Contact
    (815) 431-2811

    Daniel R. Kadolph
    Chief Financial Officer
    Centrue Financial Corporation
    Email Contact
    (815) 431-2838