How is the redemption of preferred stock reported on the statement of cash flows for Seacoast Banking Corporation of Florida?

seacoast-nat-bankThe following is from a press release from Seacoast Banking Corporation of Florida, the holding company for Seacoast National Bank, dated November 29, 2013:

“…Seacoast National Bank…announced it has issued a notice to redeem, subject to regulatory approval, all of its 2,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A… for an aggregate price of $50,000,000, the face liquidation amount of the shares, plus approximately $386,000 of accrued but unpaid dividends. The shares will be redeemed from current holders through The Depository Trust Company as securities depository for the Series A Preferred Stock. The redemption date is expected to be December 31, 2013, subject to regulatory approval.”


1)      How will the redemption of the preferred stock be classified on Seacoast’s statement of cash flows (operating, investing, or financing activity)?

2)      Will the redemption be a “cash provided by” activity or a “cash used by” activity for Seacoast?

Instructor Resources

These resources are provided to give the instructor flexibility for use of Accounting in the Headlines articles in the classroom. The blog posting itself can be assigned via a link to this site OR by distributing the student handout below. †Alternatively, the PowerPoint file below contains a bullet point overview of the article and the discussion questions. †The YouTube video link below is a narration of the blog post article (no discussion questions are included in the YouTube video; those can be assigned separately.)

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

About Dr. Wendy Tietz, CPA, CMA, CSCA, CGMA

Dr. Wendy Tietz is a professor of accounting at Kent State University in Kent, Ohio, USA. She is also a textbook author with Pearson Education.

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