Riggs National Bank yesterday said it will call in all remaining shares of the bank's convertible preferred stock.
Preferred stockholders will get their choice of $90 cash or 2.2 shares of Riggs common stock for each share of preferred.
About 26,000 shares of Riggs preferred are outstanding and there are about 850 preferred shareholders, the bank said.
The stock is being redeemed "to clean up the capital structure" of Washington's biggest bank, a bank official said.
Riggs issued its preferred stock in the 1960's when it acquired all the shares of Central Charge System. Over the years, many of the former Central Charge shareholders have redeemed their share or converted them to Riggs common shares.
The remaining stock will be redemed effective July 30. Shareholders who do not choose to either convert their stock to common shares or take the cash will get no dividends after June 29, the bank said.
Letters were sent this week to the preferred shareholders notifying them fo their options.
At the current price of Riggs' common shares, about $37, the 2.2 shares of common would be worth roughly $82, slightly less than the $90 cash offer.
The $90 redemption price was set when the preferred stock was issued. Originally the shares were convertible into 2 shares of Riggs common, but that was increased to 2.2 shares after Riggs issued a 10 percent stock dividend.
Stockholders will get greater dividends from the bank's common stock than from the preferred, a Riggs spokesman noted.
The preferred pays $4 a year in dividends, against $2.40 per share for the common. The yield on 2.2 shares of common would be $5.28 per year.
The decision to redeem the preferred shares was announced yesterday following a Riggs board of directors meeting. The bank also declared its regular dividends on both classes of stock, payable July 16 to shareholders as of June 29.