IRVINE, Calif. -- Plaza Bank, a business bank based in Irvine, California, today announced that it has entered into a definitive agreement with the Carpenter Community BancFund whereby the Fund will invest $15 million in new capital in the Bank, subject to and upon receipt of all required regulatory approvals from the Federal Deposit Insurance Corp. (FDIC), the California Department of Financial Institutions (DFI), and the Federal Reserve.
Directors of the Bank unanimously approved the agreement and the Fund's proposed capital investment. In return for its $15 million investment, the Fund will acquire 3 million newly issued shares of Plaza Bank common stock and 1.5 million warrants to acquire shares of Bank common stock. The agreement calls for the Fund to provide an immediate infusion of capital to the Bank in the amount sufficient to establish a 4.9% stake. The balance of the $15 million investment will be completed following required approvals from regulatory agencies, and is anticipated to close prior to the end of the year.
The Fund's investment in the Bank will coincide with a companion offering to existing shareholders on the same economic terms and conditions as the Fund. Shareholders will be offered the opportunity to purchase units consisting of (i) two shares of common stock and (ii) one warrant to acquire a share of common stock, all at a price of $10 per unit.
The Bank and the Fund both contemplate that the new capital investment will position the Bank for growth and expansion in line with its existing business plan. "Everyone at Plaza Bank has done an excellent job in building solid core deposit, loan and customer relationships," said Robert Feldhake, Chairman of the Board of the Bank. "This additional investment is a great compliment to existing management, every member of staff and an active working Board, as well as to our existing customers and shareholders who have supported us throughout the start up period. Now, with additional capital, we can greatly expand upon what has already been accomplished."
According to Feldhake, the investment by the Fund will allow the Bank to better serve the needs of existing and future customers, and to pursue market opportunities for the ultimate benefit of all shareholders and customers.
Following and subject to all required regulatory approvals and the closing of the investment, Mr. Gene Galloway will be appointed to serve as the new chief executive officer of the Bank, and Mr. Robert Forsythe will become its new president. Mr. Galloway is a career California banker, with a long professional history in regional banking at California Federal Bank, Crocker National Bank, and Sanwa Bank California. He completed his tenure at Sanwa as Corporate Executive Vice President and Chief of the Retail and Community Banking Group, with responsibility for over $3.5 billion in banking assets and liabilities in 118 branch banking offices. Mr. Forsythe most recently served as Chief Operating Officer of the Small Business Finance Unit of Lehman Brothers Bank, where he oversaw a staff of 400 employees that originated and serviced over $5 billion in credits to small businesses.
Current CEO and President Donald L. Solsby, who was instrumental in founding the bank three years ago and in establishing its presence in the Orange County marketplace, will be stepping aside at the close of the investment. He fully endorses the recapitalization and business development efforts of the Bank's Board, and is excited as to the benefits of this agreement for all customers, shareholders and Bank personnel.
"Through a most difficult economy, we built a bank that has an incredible client base, quality customers, a great staff and has continued to grow while many banks have shrunk in assets or faced problems with their loans," Solsby said. "As an organizer and founder, I am amazed at what we were able to accomplish so far, and look forward to the partnership with the Fund and to the special place Plaza Bank will hold in the Southern California banking community."
This news release contains forward-looking statements with respect to the financial condition, results of operation and business of Plaza Bank. These include, but are not limited to, statements that relate to or are dependent on estimates or assumptions relating to the prospects of loan growth, credit quality and certain operating efficiencies resulting from the operations of the Bank. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) competitive pressure among financial services companies increases significantly; (2) changes in the interest rate environment reduce interest margins; (3) general economic conditions, internationally, nationally or in the State of California are less favorable than expected; and (4) legislation or regulatory requirements or changes adversely affect the business in which the Bank will be engaged.
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