Herald National Bank Raises $32 Million in Capital
April 02 2010 - 7:00AM
Business Wire
Herald National Bank (NYSE AMEX: HNB), a New York-based
full-service commercial bank, announced today the completion of a
private placement of 10.7 million shares of its common stock and
Series A preferred stock at $3.00 per share. The private placement
was completed in two tranches, with the first tranche of $7.5
million closing December 30, 2009 and the second tranche of $24.5
million closing on March 31, 2010. The gross proceeds to Herald
National Bank from the offering were approximately $32 million,
prior to the deduction of placement fees and offering expenses. The
offering was lead by Sandler O'Neill + Partners, LP with
participation from Freeman & Co. Securities LLC.
Key highlights of the offering include:
- Approximately $29 million in
additional tier one capital, net of estimated offering related
expenses
- Chairman of the Board, Raymond
A. Nielsen elected to the additional position of Chief Executive
Officer
"The capital raise enhances Herald National Bank’s capital
position and increases our pro-forma tier one capital ratio to a
level considerably in excess of that required of de novo banks,
which is significantly higher than the ratio required of older more
established banks,” stated Herald National Bank President, David S.
Bagatelle. “We are pleased to have the support of our institutional
investors and look forward to working with them as we continue to
build our relationship based franchise in the New York metropolitan
area," he concluded.
"The investors in this offering have reaffirmed their confidence
in our business plan and our ability to execute. Unlike many
offerings in the financial services sector these days, our offering
was not about balance sheet repair, rather the capital we raised
strengthens our bank’s ability to work with and lend to many of the
premier middle market businesses in our market area,” added
Chairman of the Board and CEO, Raymond A. Nielsen.
New York-based, Clinton Group was the lead investor in the
offering with a 24.9% investment in the Bank. In total five new
institutional investors participated in the offering including: The
Clinton Group, Blue Atlantic Capital, Triumph Investment Funds, and
ALDA Capital, LLC. In addition to the new investors, four of Herald
National Bank’s initial institutional investors and Raymond A.
Nielsen also participated in the private placement.
“Our investment in Herald is based on our confidence in this
management team and the capacity to capitalize on the many
opportunities that exist for a locally managed, middle market bank
in the New York metropolitan area,” stated George Hall, President
and CEO, of The Clinton Group. “We were attracted to the clean
balance sheet, core deposit growth, and recent measures taken to
improve their operational efficiency,” he continued.
David Perez, of Palladium Equity Partners, an initial investor
in the bank and participant in this offering commented, “Our team
at Palladium contributed to the recapitalization of Herald National
Bank because of a continued belief in the fundamentals of this
business plan and its long-term potential in this marketplace and
the ability of management to execute on that plan.”
Immediately following the offering, Herald National Bank also
made several changes to its management and board structure designed
to enhance the oversight and operations of the bank. First, the
bank has separated the offices of Chief Executive Officer and
President, with current Chairman of the Board Raymond A. Nielsen
assuming the office of Chief Executive Officer, subject to
regulatory non-objection. David S. Bagatelle has retained the
office of President – a move that allows Bagatelle to focus on
day-to-day management and direct support of the bank’s business
development efforts. Second, the Board of Directors has reduced in
size from 15 persons to 10 persons, resulting in resignations from
five directors to accommodate the reduction in size. As a result of
significant investments by The Clinton Group and ALDA Capital, LLC
the Board of Directors expects to nominate representatives of each
entity to serve on the Board of Directors, subject to regulatory
non-objection, which will be expected to result in two additional
director resignations.
About Herald National Bank
Herald National Bank is a relationship-based banking institution
dedicated to serving the commercial and private banking needs of
small to mid-size businesses, their owners, executives and senior
managers, as well as high net worth individuals in the New York
metropolitan area. Herald National Bank presently has three offices
located in Manhattan (623 Fifth Avenue), Brooklyn (1333 60th
Street), and Melville, Long Island (58 South Service Road). As of
December 31, 2009 the bank had $443 million in assets of which $301
million were loans. Deposits at December 31, 2009 were $405
million, of which 93% were core deposits and 35% of which were
checking accounts, largely the operating accounts of the businesses
served by the bank.
For more information, visit www.heraldnb.com.
Forward Looking Statements Disclaimer
Certain matters in this press release constitute forward-looking
statements that involve assumptions and potential risks and
uncertainties, which are made in a manner consistent with the safe
harbor provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These forward looking statements involve known and
unknown risks, uncertainties, and other factors that may cause the
actual results, performance and achievements of Herald National
Bank to be materially different from any future results,
performance or achievements expressed or implied by such forward
looking statements. These factors include: general economic,
capital market and business conditions; risks arising from
litigation or similar proceedings; interest rate fluctuations;
levels of delinquent loans; employee turnover; government
regulation; and those other factors discussed in the filings of
Herald National Bank with the Office of the Comptroller of the
Currency. Herald National Bank undertakes no obligation, and
expressly disclaims any obligation, to update publicly or revise
any forward looking statement, which speaks only as of the date it
is made, whether as a result of new information, future events or
otherwise.
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