GSA Daily Staff Report
Published June 10, 2010
Palmetto Bancshares Inc. announced today that it received additional commitments to complete a $100 million infusion of capital.
The Greenville-headquartered institution previously announced a $55 million stock-purchase agreement with CapGen Financial Partners.
Today, Palmetto Bank announced another $45 million in commitments from Patriot Financial Partners and other institutional investors to invest in the company’s common stock through a private placement. The newest commitments include $23.3 million from Patriot Financial Partners, $10.4 million from Sandler O’Neill Asset Management, and the remaining $11.3 million from unnamed institutional investors.
“We have been hard at work executing the Strategic Project Plan we adopted in June 2009 to address the loan portfolio credit quality issues which resulted from the extended recession of the past two years. We expect that raising capital, combined with an improving economy, will accelerate our road to recovery and return to profitability in the post-recession environment,” said Palmetto Bank CEO Samuel L. Erwin.
The consummation of the private placement is subject to a number of conditions, including approval by the company’s shareholders of a proposal to increase the number of authorized shares of common stock, and the investors receiving the necessary bank regulatory approvals and determinations.
As a result of the private placement, Palmetto Bank’s annual meeting of shareholders scheduled for June 22 will be rescheduled.
Under the stock purchase agreement with the investors, the company also is permitted to conduct a $10 million follow on offering after the closing of the private placement that would allow current shareholders to purchase common stock in Palmetto Bank.
“Completing the capital raise is a very important step for us,” said Board Chairman Leon Patterson. “We appreciate the loyal support of our shareholders over our 103-year history, and we are excited about the future. We are committed to moving forward in our second century of serving the Upstate of South Carolina with innovative ways of banking while continuing to provide outstanding customer service.”
The company expects to use the net proceeds from the private placement primarily to contribute capital to The Palmetto Bank. The capital contribution to the bank will result in adequate capital ratios that exceed the minimum capital levels required to be categorized as “well capitalized.”