An Idaho start-up bank has called off a private-equity deal that it had hoped would help it reach profitability.
The $67.5 million-asset Idaho First Bank in McCall said it still aims to raise capital but has terminated an agreement with Alcar LLC.
Idaho First, which had planned to sell $7.1 million of preferred stock to Alcar, said it disagreed with changes that the private-equity firm wanted to make to the agreement that had been announced in late April. It did not specify the proposed changes.
"The bank is vigorously pursuing other alternatives to raise additional capital," it said Wednesday.
The initial deal called for Alcar's preferred shares to convert to common stock no later than Dec. 31, 2012. The preferred shares would have had voting rights, but would not have paid dividends. Alcar also would have received two board seats.
In April, Idaho First, which opened in October 2005 and has yet to report a profitable year, said the additional capital would help it grow enough to get into the black.
In the first quarter Idaho First narrowed its loss by 45% from the year-earlier quarter, to $395,000, according to data from the Federal Deposit Insurance Corp. Its loans rose 51%, to $55.4 million.
Idaho First was well capitalized at March 31, with a total risk-based capital ratio of 10.94%.
It said Wednesday that it would remain well capitalized at the end of the second quarter despite the collapse of the Alcar deal.
