ECB Bancorp Inc.'s plan to raise $80 million from private-equity groups and institutional investors has been put hold because regulators have yet to approve the pact.
The Engelhard, N.C., company had announced in September that it had reached a deal to issue nearly five million shares to Pacific Investment Management Co., Patriot Financial Partners and Endicott Management and other investors at $16 each and would use the proceeds to exit the Troubled Asset Relief Program and to support future growth.
Late Wednesday, the $942 million-asset parent of East Carolina Bank said it had mutually agreed with the investors to terminate the deal because it had not won regulatory approval by the previously agreed upon Jan. 31 deadline. In an interview Thursday, ECB's chief financial officer, Tom Crowder, said that the deadline was missed because one of the investors had not received formal approval to buy its stake in the company.
Crowder also said that the snag in the completing the capital raise has delayed its planned acquisition of seven North Carolina branches and roughly $200 million of deposits from Hampton Roads Bancshares Inc. of Norfolk, Va. That deal, announced over the summer, was expected to close in the fourth quarter.
The company said in its news release that is working with investors on a new deal with similar terms, but it acknowledged that there are no assurance that an agreement would be reached.
Crowder added that he believes ECB could still complete the branch acquisition without raising additional capital, but said it would it ultimately be regulators' decision.