Augusta-based Southeastern Bank Financial Corp. instead raised $12 million in capital through a private placement, said its president R. Daniel Blanton.
Although we are well-capitalized and have adequate loan loss reserves, we wanted to raise additional capital as a prudent hedge against a prolonged recession, Mr. Blanton said.
The company sold approximately $9 million in stock to directors, officers and other accredited investors over the past three weeks. Another $3 million was raised through a debenture, a certificate of agreement of loan.
Mr. Blanton said there was relief among investors when they found out the financial corporation withdrew its federal funding application.
The reason for withdrawing was concern over what was happening with other banks that accepted Troubled Asset Relief Program funds.
They might convert preferred stock to common stock. It just scared me. If we had accepted that, that would have given (the government) 15 to 18 percent ownership in the company, Mr. Blanton explained. We made the best decision for our company based on the information available.