How much does Seacoast Banking Corporation of Florida pay to redeem one share of its preferred stock?

The 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.”

Questions

1)      Is Seacoast National Bank required to pay the accrued dividends?  How do you know?

2)      How much is the accrued dividend on each preferred share?

3)      What does “face liquidation value” mean? What is the face liquidation value of each share of preferred stock?

4)      How much in total will each preferred share be redeemed for?

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.)

• Student handout (pdf) (contains entire blog posting + discussion questions)
• PowerPoint file (brief article overview + discussion questions)
• YouTube video (narrated article in shareable YouTube link)

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