Several private-equity firms have helped inject $40 million into a growing three-year-old Florida banking company that had run low on capital.
Lovell Minnick Partners LLC announced Monday that it invested $15 million in Three Shores Bancorp., the parent company of Seaside National Bank and Trust in Orlando. Parthenon Capital LLC, Continental Investors and existing Three Shores shareholders put in an additional $25 million.
Lovell Minnick said that it would get a board seat at both Three Shores and Seaside as part of the deal, and that it could invest more money later to support further growth.
Over the past year Seaside's assets have swelled 240%, to $830 million, according to data from the Federal Deposit Insurance Corp. However, its total risk-based capital ratio dipped to 8.24% at Sept. 30. This ratio must be at least 10% for a bank to be considered well capitalized.
Seaside, which opened in late 2006, has yet to post a profitable year, the FDIC data showed. But its noncurrent loans and chargeoffs remain relatively low. It has 13 branches throughout Florida, including two that opened in January.
John Cochran, a Lovell Minnick principal, said in a press release that his company conducted extensive due diligence on Seaside and was attracted to its sound underwriting, wealth management services and strong management team.
Lovell Minnick also said it intends to help Seaside expand in wealth management through a partnership, but did not disclose specifics. The bank has $140 million of assets under advisement.
In the press release, Gideon Haymaker, Seaside's president and chief executive, called the capital infusion "a tremendous vote of confidence" from the investors. He said the bank would use the money to continue growing.
Further details about the deal, such as how much Three Shores stock the investors would receive, were not disclosed. But Three Shores recently sought regulatory permission for a change in control that would let it sell about half its outstanding shares. In separate filings with the Federal Reserve Bank of Atlanta in October, it asked that Lovell Minnick and its affiliates, all of El Segundo, Calif., be allowed to acquire up to 24.9% of its shares, and that Parthenon and its affiliates, all of Boston, be allowed to acquire up to 24.9%.
Lovell Minnick said its investment would be made with funds from Lovell Minnick Equity Partners II LP.
