SANTA FE, N.M. — Three private-equity firms are looking to acquire a minority stake in Los Alamos National Bank through a $52 million recapitalization, which the bank’s leader said helps put the financial institution on more solid footing.
Trinity Capital, parent company of LANB, said it has entered into a stock purchase agreement with Castle Creek Capital Partners, Patriot Financial Partners and Strategic Value Bank Partners. In addition to the cash infusion, the agreement also permits the company to conduct, within one year following completion of the agreement, a rights offering to existing shareholders of up to $10 million in voting common stock.
The transaction with the new investors should close in early October once regulators sign off on the deal. The two lead investors, Castle Creek and Patriot, will each have 9.9 percent voting common ownership interest and representatives appointed to LANB’s board of directors.
The company’s president and CEO said the pending capital boost is a sign of an improving financial picture at the bank, which, under previous leadership, paid more than $1.5 million to settle allegations of civil accounting fraud regarding loans that dropped in value during the recession.
“We are encouraged that our new investors have confidence in our turnaround efforts,” said John Gulas, president and CEO of both Trinity and LANB. “We believe this new capital enables us to address the most difficult remaining challenge in restoring the company to a safe and sound condition.”
The bank currently has $1.4 billion in total assets.
Gulas joined LANB in May 2014 from Farmers National Banc Corp., where he was president and chief executive officer. He had been recognized by the American Bankers Association for leading Farmers to become one of the top community banks in the country.
Gulas said the placement by the private-equity investors will retire some of the debt remaining from $35.5 million in funding from the federal Troubled Asset Relief Program that Trinity received in 2009.
The community bank, started in 1963 by scientist George Cowan with his own money, is the fourth-largest ranked by deposits in New Mexico and has 85 percent of all the banking business in Los Alamos County, according to financial filings.
With 75,000 customers and 300 employees, LANB has six branches in Los Alamos, White Rock, Santa Fe and Albuquerque, where the company is expanding its footprint in a new 24,000-square-foot branch slated to open in the first quarter of 2017. The new branch at 7445 Pan American NE, will be in a building LANB purchased for $4 million to house its Duke City headquarters.