Posted on the Biz Buzz blog at 11:45 a.m. Friday Columbia Banking System, parent of Columbia Bank, said Friday that it has raised approximately $76.9 million by issuing shares of stock to the U.S. Department of Treasury.

The Tacoma-based bank issued 76,898 shares of Series A preferred stock – at $1,000 per share – to the Treasury Department as a voluntary participant in the Treasury’s Capital Purchase Program.

Meanwhile, Heritage Financial Corp. of Olympia, parent company of Heritage Bank and Central Valley Bank, announced that it has raised $24 million in cash by selling the Treasury 24,000 shares of Series A preferred stock with the right to purchase 276,074 shares of the company’s common stock.

This is part of the Emergency Economic Stabilization Act of 2008, which allowed the Treasury to purchase up to $700 billion in distressed assets. The banks applied to participate, and their applications were approved.

At Columbia, President and CEO Melanie Dressel said in a statement, “We are pleased to have been selected as one of the first regional banks to participate in the Treasury’s program, further affirming our financial strength. The additional equity bolsters our already strong capital levels, enhances our ability to lend and increases our flexibility to pursue strategic opportunities which may arise.”

The preferred stock carries a 5 percent coupon (or interest rate) for five years and 9 percent thereafter, Columbia said. In addition, the Treasury will receive a warrant or the right to purchase 796,046 shares of Columbia common stock at an initial exercise price of $14.49 per share. The warrant will expire in 10 years.

Heritage President and CEO Brian Vance said, “I am pleased to announce we have completed this transaction and it is an indication of our strength as a community bank that we were included as one of the early recipients of these funds. We are fortunate in that we had the opportunity to consider this capital injection from a position of strength. We did not need nor require this capital.”

He said Heritage would use the funding primarily to bolster credit relationships.

Bank stocks were mostly down, with Columbia down 37 cents, to close at $8.85.

Heritage was also down, sliding $1.66 cents to $12.05 – down from a 52-week high of $21.70 last December.

Rainier Pacific hit a 52-week low of $2.50 Friday, down $1.06, or nearly 30 percent on the day, according to Bloomberg.

Frontier Bank, down 84.92 percent on the year, was up 53 cents to $2.80.

C.R. Roberts: 253-597-8538

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