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.