Yucaipa, WL Ross to Invest $100 Million in Amalgamated of New York

Two private-equity groups have agreed to invest a combined $100 million in a union-owned, New York bank that intends to use the proceeds to beef up its lending.

The $4.4 billion-asset Amalgamated Bank said Monday that affiliates of Yucaipa Cos. and WL Ross & Co. LLC have each agreed to invest $50 million in the bank through the purchase of Amalgamated common stock.

Upon completion of the transactions later this year, Yucaipa and WL Ross would each own a 20% stake in Amalgamated.

The investments would fulfill a promise Amalgamated's new chief executive made earlier this year to boost the bank's capital ratios with investments from private-equity groups.

Though Amalgamated already is already well capitalized, President and CEO Edward Grebow told American Banker in May that he would like to see the bank's leverage ratio rise to 8% from 6%, which would require about $100 million in fresh capital.

Before joining Amalgamated earlier this year, Grebow was a managing director at the private-equity firm J.C. Flowers & Co.

In a news release Monday, Grebow said that the additional capital "will enable us to further expand our lending capacity and pursue key strategic initiatives that will drive additional revenue growth."

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