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The Whiteville-based parent of Waccamaw Bank said in the filing with the Securities and Exchange Commission that it is seeking the cash to improve its capital ratios, and to support additional lending, retire outstanding debt or redeem outstanding securities.
Waccamaw's total risk-based capital ratio was 11.46 percent at the end of the first quarter, up from 10.32 percent a year earlier.
Under Federal Deposit Insurance Corp. rules, a bank is "well capitalized" if that ratio is at least 10 percent.
The offering would consist of 400,000 units, each comprising preferred stock with a par value of $25 a share, and one warrant to buy one share of common stock at $5.
Common shares of Waccamaw (WBNK) traded at about $3.95 Friday on the Nasdaq exchange.
Each share of the Series B Mandatory Convertible 7 percent Non-Cumulative Perpetual Preferred stock must be converted into six shares of common stock three years after issuance, the filing said.
The warrant would be exercisable for five years from the date it is issued, according to the filing July 2.
The bank said in the filing that 300,000 of the units would be offered to shareholders of record as of May 15.
Those shareholders would have the right to buy one unit for every 18 common shares they held at the end of the business day May 15. The public would be offered an additional 100,000 units, plus any units not bought by the shareholders.
Norfolk-based McKinnon & Co. Inc. will be the agent for the public offering, and those units will trade on Nasdaq.
The company said it reserved the right to increase the public offering by up to 60,000 units.
Waccamaw would raise about $11.5 million if 400,000 units were bought at the $25 each, according to the filing.
Conversion of the preferred shares and exercising of the warrants would add 2.8 million shares to Waccamaw's current 5.524 million common shares outstanding.
Last year, the bank raised more than $4 million to be used as working capital through an issue of debentures, or unsecured corporate bonds.
The bank posted a net loss of $135,539 in the first quarter versus a profit of $510,343 in the first quarter of 2008. For all of 2008 it lost $2.04 million.
In 2007 it had a profit of nearly $4 million.
Wayne Faulkner: 343-2329
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