City National Bank of New Jersey in Newark has completed a $20 million recapitalization.
The $257 million-asset bank raised capital from several investors, including Skopos Impact Fund and Prudential Insurance Co. of America. The recapitalization will allow City National Bank to continue as a certified Community Development Financial Institution, the bank said.
City National Bank "has been a crucial source of capital and banking services for families, local small businesses, faith-based institutions and nonprofit organizations in our neighborhoods" Newark Mayor Ras Baraka said in a news release.
City National Bank is the only bank in New Jersey that was certified as a CDFI, as of June 30. Several credit unions and other organizations in New Jersey are also certified CDFIs.
Other investors that participated in City National Bank's recapitalization included New United Corp., East Coast Capital and the $356 million-asset Industrial Bank in Washington, D.C. JPMorgan Chase and Goldman Sachs Urban Investment Group provided financial advice on the investment round and Sullivan & Cromwell was legal counsel.
City National Bank continues to operate under a December 2010 consent order from the Office of the Comptroller of the Currency, requiring it to improve capital ratios; hire qualified personnel for the positions of president, senior credit officer, consumer compliance officer and Bank Secrecy Act officer; improve its loan portfolio management; maintain an adequate allowance for loan and lease losses; and take other steps.
City National Bank was founded to help rehabilitate Newark after riots in 1973. The bank says it is one of the largest African-American owned banks in the country.