LOS ANGELES, July 22, 2014 (GLOBE NEWSWIRE) -- Pan American Bank (OTCQB:PAMB), the oldest Hispanic community bank in the Western United States, announced today that it will remain open thanks to the unprecedented cooperation of 16 leading western community banks. This transaction marks the first time in the nation's history that peer banks have come together to recapitalize an ethnically-oriented bank that works with an underserved population. The bank entered into securities purchase agreements to raise aggregate gross proceeds of $6.3 million through the sale of approximately 16.6 million shares of voting common stock and 109.4 million shares of non-voting common stock. This recapitalization will increase the bank's Tier 1 Leverage Ratio to 15.2%, providing the needed funds to solidify the bank's capital structure and support future growth.
This unique stock offering was subscribed to by a number of Pan American's peers, including:
Pan American Bank was founded in 1964 by former United States Treasurer Romana Bañuelos. The bank is focused on serving the Latino and immigrant communities in Southern California and is an active lender in the small business and consumer markets. "As we celebrate our fiftieth year in banking, we are very excited about raising fresh capital and re-launching our bank," said Mona Bañuelos, trustee of the Bañuelos Trust and a long time director of the bank. "My mother founded this bank with the dream of providing vital services to our under-served communities. It is heartwarming to see major regional banks coming together to help restore our bank's financial strength." The Bañuelos Family Trust remains the largest shareholder of Pan American Bank.
"This transaction was unique in many ways and is a significant milestone for the banking industry," said John Eggemeyer, Chairman of the Board of PacWest Bancorp (PACW) and President and CEO of Castle Creek Capital LLC. "It is rare that a group of bankers have rallied to save one of its peers, especially a group as widespread and diverse as the 16 banks that came together in this transaction. In my 30 year career in the banking industry, I have never been more proud to be a part of a transaction because this one is going to have such an important impact in this community."
"The economic downturn that impacted banks throughout the nation was particularly difficult for Pan American Bank," said Timothy Chrisman of Chrisman & Company who worked closely on this transaction. "Pan American Bank has been a leader in financial literacy for this community and has established a strong reputation with bankers, investors and consumers."
"Pan American Bank has been serving its community for fifty years and is a Community Development Financial Institution (CDFI)," said Jan Lynn Owen, Commissioner for the California Department of Business Oversight, Pan American Bank's regulator. "This new capital will allow the bank to continue to meet the needs of an important constituent base, and expand the good work of this institution."
"Pan American Bank, a Community Development Financial Institution (CDFI), has been committed to serving the Latino community for decades. I am pleased to hear that it has been re-capitalized and will continue serving the East L.A. community and the entire region with strong financial products," U.S. Representative Lucille Roybal-Allard.
"I am glad to have Pan American Bank, the only bank headquartered in East L.A., in my district. The new infusion of capital will keep PAB serving our Latino community with strong financial products," Jimmy Gomez, Assemblymember, 51 Assembly District.
"The East L.A. Community has been well served by the oldest Latino Bank. Pan American Bank understands the importance of investing in our community and developing sophisticated consumers through strong financial literacy programs. The re-capitalization of Pan American Bank is a direct investment in our community that will yield great social, cultural and economic results," Benjamin Cardenas, President of the East L.A. Residents Association.
"We are extremely grateful to our investors who believe in our commitment to our communities, and for the support we have received from the regulators," said César Rosas, VP of Finance and Investor Relations of Pan American Bank. "We look forward to getting back to business and continuing to help the Hispanic community with their banking needs."
"The cooperation on this transaction between bankers, their advisors, and the regulators, both at the state and federal level, was extraordinary," said Arthur A. Coren, of Horgan, Rosen, Beckham & Coren, L.L.P., Calabasas, California, who provided legal counsel to Pan American Bank. "What has been accomplished here is truly historic, heroic and unselfish, bringing much needed financial services to support this local community."
Concurrent with the recapitalization, the Board of Directors entered into a six month contract with Robb Evans, of REA Consulting LLC, to act as interim Chief Executive Officer. "Evans has the executive experience and organizational skills to lead the revival of this institution," added Banuelos. In addition to reorganizing the institution, Evans will be initiating a search for a new President, a position that has been vacant since April of this year. The board also elected Evans as a director and Chairman of the Board.
"With the support and guidance from so many very strong community banking organizations, I am confident that we will continue to provide the financial services in the Hispanic communities that we all agree are sorely needed. It is a real source of pride to see the banking community rallying to such a worthy cause," added Evans.
Evans has a long history in California banking, having served as CEO of several institutions in California and internationally prior to his founding his organization, a firm specializing in transitional management situations, primarily involving financial enterprises. He is past president of the California Bankers Association and was named that organization's Distinguished Banker of the Year in 2012.
Cautions Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other laws, including all statements in this release that are not historical facts or that relate to future plans or events or projected results of Pan American Bank. These forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those projected, anticipated or implied. These risks and uncertainties include various risks associated with growing the bank and expanding the services it provides, successfully completing and integrating the recapitalization of the bank and development of new business lines and markets, competition in the marketplace, general economic conditions, changes in interest rates, extensive and evolving regulation of the banking industry, and many other risks. We undertake no obligation to update or revise any forward-looking statement. Readers of this release are cautioned not to put undue reliance on forward-looking statements.
Cesar Rosas, VP Finance Pan American Bank 323-264-3310 ext. 423 The Cereghino Group IR CONTACT: 206-388-5785