BEND, Ore., Nov. 16, 2010 /PRNewswire-First Call/ -- Cascade
Bancorp (Nasdaq: CACB) (the "Company") announced today that it has
entered into Securities Purchase Agreements for the purchase and
sale of approximately $177 million of
shares of its common stock ("Common Stock"). Private
placement investors who have entered into separate agreements with
the Company include, among others: David F. Bolger
("Mr. Bolger"), an affiliate of Lightyear Fund II, L.P.
("Lightyear"), private equity funds affiliated with Leonard Green & Partners, L.P.
("Leonard Green" or "LGP") and
private equity funds affiliated with WL Ross & Co. LLC ("WL
Ross").
Patricia L. Moss, Chief Executive
Officer of Cascade Bancorp, commented, "We are pleased that, after
closing of the transactions contemplated by the Securities Purchase
Agreements, our capital ratios will notably exceed regulatory
agency benchmarks for a 'well-capitalized' bank. Upon
closing, not only will Cascade Bancorp's strong pro forma capital
ratios place the Company among the best capitalized community banks
in the nation, the Bank will also exceed the 10% leverage ratio
required by our regulatory order. This investor vote of
confidence in our company and the communities we serve will provide
the financial strength to sustain our market position as a premier
local bank serving customers in the communities of Oregon and Idaho."
Moss continued, "For the past eighteen months we have focused
our strategies and efforts on improving our capital position,
reducing risk in the loan portfolio and positioning ourselves for a
future of serving the financial needs of our customers. We
are pleased with the deep industry knowledge that our high-quality
lead investors -- WL Ross, Leonard
Green, Lightyear, and Mr. Bolger -- bring to the Company.
As we reflect on these challenging times, we are energized
and inspired by our loyal customers whose support has been integral
to our success in this capital raise. We remain committed to
delivering ongoing value to our customers as we reinforce the value
of community banks in fueling a return to economic health."
The following provides additional detail as to the capital raise
transaction:
Upon completion of the transaction, each of Leonard Green, Lightyear, and WL Ross will own
24.35%, and Mr. Bolger will own 14.01%, of our outstanding Common
Stock. The purchase price per share of our Common Stock for
each investor will be $0.40 (subject
to adjustment for the Company's anticipated reverse stock split, as
described below). Closing of the investments under the
Securities Purchase Agreements is subject to several closing
conditions, including, among others, (i) the receipt of
required shareholder and regulatory approvals; (ii) the receipt by
the Company of gross proceeds of at least $165 million; and (iii) the completion of the
Company's previously announced repurchase of its outstanding trust
preferred securities at an 80% discount. At the closing, each
of Lightyear, Leonard Green, and WL
Ross will have one representative joining Cascade Bancorp's Board
of Directors. Thomas M. Wells currently serves as the Cascade
Bancorp Board of Directors designee for David F. Bolger.
Keefe, Bruyette & Woods, Inc. served as lead placement agent
and Macquarie Capital (USA) Inc.
served as co-placement agent for Cascade Bancorp in the private
placement.
The Company also announced that its Board of Directors has
elected to effect a 1 for 10 reverse stock split that will be
effective Monday, November 22, 2010,
when the Common Stock will begin trading on a post split-adjusted
basis under the interim trading symbol CACBD for a period of 20
days, after which the Company's trading symbol will return to CACB.
As a result of the reverse stock split, each ten shares of
the Company's Common Stock outstanding at the time of the reverse
split will be automatically reclassified and changed into one share
of Common Stock, and the total number of shares of Common Stock
outstanding will be reduced from approximately 28.5 million to
approximately 2.85 million post-split. Since no fractional
shares will be issued in connection with the reverse stock split,
shareholders will receive cash in lieu of the fractional shares to
which they would otherwise be entitled. The terms and reasons
for the reverse stock split are more fully described in the
Company's proxy materials filed with the Securities and Exchange
Commission on November 10, 2009.
The reverse stock split was approved by the Company's
shareholders on December 7, 2009.
Upon the completion of the reverse stock split, the purchase
price per share of our Common Stock for each investor will be
adjusted proportionately.
About David F. Bolger:
David F. Bolger became the
largest shareholder of Cascade Bancorp in April 2006, when he merged Boise, Idaho based Farmers & Merchants
State Bank, owned by him, into the Company. During Mr.
Bolger's ownership, Farmers & Merchants State Bank grew in net
assets from $28 million to $612
million. In addition to his extensive background in
investment banking, and real estate development and management
throughout the United States, Mr.
Bolger has been an active equity investor in various public
companies, including a number of significant financial
institutions. David Bolger demonstrated his long-term
commitment to Cascade Bancorp, and the capital raise process, by
early-on declaring his willingness to invest additional capital to
his already substantial investment in the company. Mr. Bolger
was represented by Sullivan & Cromwell LLP.
About Lightyear Capital:
Lightyear is a private equity investment firm providing buyout
and growth capital to companies in the financial services industry.
Based in New York, Lightyear,
through its affiliated funds, has managed approximately
$3 billion of committed capital with
investments across the financial services spectrum, including asset
management, banking, brokerage, financial technology, insurance,
leasing, related business services and other sectors within
financial services. Lightyear brings unique strengths and
discipline to its investment process, as well as operating,
transaction, and strategic management experience, along with
significant contacts and resources beyond capital. It is
anticipated that Chris Casciato, a
Managing Director of Lightyear, will be elected to the Board of
Directors of Cascade Bancorp upon completion of the transaction,
subject to regulatory approval. Lightyear was represented by
Simpson Thacher & Bartlett LLP.
About Leonard Green &
Partners:
Leonard Green & Partners,
L.P. is one of the nation's leading private equity firms with over
$9 billion in equity commitments
under management. Since its inception in 1989, LGP has
sponsored investments in companies with an aggregate value in
excess of $42 billion. LGP
invests in a diverse range of industries including retail,
distribution, business services, financial services, media,
healthcare and consumer products. It is anticipated that
Michael J. Connolly, a Partner of
LGP, will be elected to the Board of Directors of Cascade Bancorp
upon completion of the transaction, subject to regulatory approval.
Leonard Green was represented by
Skadden, Arps, Slate, Meagher & Flom LLP.
About WL Ross & Co. LLC:
WL Ross was organized on April 1,
2000 when Wilbur L. Ross, Jr.
and a team of other professionals left Rothschild Inc. to form a
private equity investment firm with $450
million of assets under management. Since then, the
firm has sponsored more than $10
billion of private equity investments in diverse industries,
including airlines, automotive components, banking, independent
power producers, insurance, railcar manufacturing and leasing,
steel and textiles in North and South
America, Europe and
Asia. WL Ross has invested
in several banks, including Sun National
Bank in Vineland, New
Jersey, First Michigan Bank in Troy, Michigan, BankUnited in Miami Lakes, Florida, Virgin Money in the
United Kingdom and Kansai Sawayaka
Bank in Osaka, Japan, with more
than $20 billion in total assets.
WL Ross has locations in New York
City, Beijing, Bombay, Tokyo
and West Palm Beach. It is
anticipated that James B. Lockhart,
Vice Chairman of WL Ross, who was previously the Director and
Chairman of the Board of the Federal Home Finance Agency, which
regulated Fannie Mae, Freddie Mac, and the Federal Home Loan Banks,
will be elected to the Board of Directors of Cascade Bancorp upon
completion of the transaction, subject to regulatory approval.
WL Ross was also represented by Skadden, Arps, Slate, Meagher
& Flom LLP.
About Cascade Bancorp and Bank of the Cascades:
Cascade Bancorp (NASDAQ: CACB), headquartered in Bend, Oregon, and its wholly-owned subsidiary,
Bank of the Cascades, operates in Oregon and Idaho markets. Founded in 1977, Bank of
the Cascades offers full-service community banking through 32
branches in Central Oregon,
Southern Oregon, Portland/Salem and Boise/Treasure
Valley.
In connection with the proposed investments, a proxy statement
relating to certain of the matters discussed in this release is
expected to be filed with the SEC. When filed, copies of the proxy
statement and other related documents may be obtained free of
charge on the SEC website (www.sec.gov). THE COMPANY'S SHAREHOLDERS
ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE,
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Cascade Bancorp, its
directors, executive officers and certain members of management and
employees may be considered "participants in the solicitation" of
proxies from the Company's shareholders in connection with certain
of the matters discussed in this release. Information regarding
such persons and their interests in Cascade Bancorp is contained in
the Company's proxy statements and annual reports on Form 10-K
filed with the SEC. Shareholders and investors may obtain
additional information regarding the interests of the Company and
its directors and executive officers in the matters discussed in
this release, which may be different than those of the Company's
shareholders generally, by reading the proxy statement and other
relevant documents regarding the matters discussed in this release,
which are expected to be filed with the SEC. The information
contained in this release is not intended as a solicitation to buy
the Company's stock and is provided for general information.
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements about
Cascade Bancorp's plans and anticipated results of operations and
financial condition. These statements include, but are not limited
to, our plans, objectives, expectations and intentions and are not
statements of historical fact. When used in this report, the
word "expects," "believes," "anticipates," "could," "may," "will,"
"should," "plan," "predicts," "projections," "continue" and other
similar expressions constitute forward looking statements, as do
any other statements that expressly or implicitly predict future
events, results or performance, and such statements are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Certain risks and
uncertainties and the Company's success in managing such risks and
uncertainties may cause actual results to differ materially from
those projected, including among others, the risk factors described
in our quarterly report on Form 10-Q filed with the Securities and
Exchange Commission (the "SEC") for the quarter ended September 30, 2010, as well as the following
factors: the investment transactions described in this release may
not be completed in a timely manner or at all; our inability to
comply in a timely manner with the cease and desist order with the
Federal Deposit Insurance Corporation ("FDIC") and the Oregon
Division of Finance and Corporate Securities ("DFCS") and the
written agreement entered into with the Federal Reserve Bank and
DFCS, under which we are currently operating, could lead to further
regulatory sanctions or orders, which could further restrict our
operations and negatively affect our results of operations and
financial condition; local and national economic conditions could
be less favorable than expected or could have a more direct and
pronounced effect on us than expected and adversely affect our
results of operations and financial condition; the local
housing/real estate market could continue to decline for a longer
period than we anticipate; the risks presented by a continued
economic recession, which could continue to adversely affect credit
quality, collateral values, including real estate collateral and
OREO properties, investment values, liquidity and loan
originations, reserves for loan losses and charge offs of loans and
loan portfolio delinquency rates and may be exacerbated by our
concentration of operations in the States of Oregon and Idaho generally, and the Oregon communities of Central Oregon, Northwest Oregon, Southern Oregon and the greater Boise area, specifically; we may be compelled
to seek additional capital in the future to augment capital levels
or ratios or improve liquidity, but capital or liquidity may not be
available when needed or on acceptable terms; interest rate changes
could significantly reduce net interest income and negatively
affect funding sources; competition among financial institutions
could increase significantly; competition or changes in interest
rates could negatively affect net interest margin, as could other
factors listed from time to time in the Company's SEC reports; the
reputation of the financial services industry could further
deteriorate, which could adversely affect our ability to access
markets for funding and to acquire and retain customers; and
current regulatory requirements, changes in regulatory requirements
and legislation and our inability to meet those requirements,
including capital requirements and increases in our deposit
insurance premium, could adversely affect the businesses in which
we are engaged, our results of operations and financial
condition.
These forward-looking statements speak only as of the date of
this release. The Company undertakes no obligation to publish
revised forward looking statements to reflect the occurrence of
unanticipated events or circumstances after the date hereof.
Readers should carefully review all disclosures filed by the
Company from time to time with the SEC.
SOURCE Cascade Bancorp