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Here's a twist in the latest episode of a Gulf Coast community's bank search for capital: Sarasota-based Landmark Bank of Florida recently received letters of intent for capital infusions worth more than $6 million — with no control changes at the bank as a prerequisite for the investment.
handful of other Gulf Coast banks have raised capital over the past few months, but in almost every case the investments came with strings, such as major changes to a bank's board or executive structure.
The investment at Landmark, which the bank announced in a December letter to shareholders and investors obtained by the Review, comes at the right time: The bank, like most others on the Gulf Coast, has been under an agreement with state and federal regulators to raise capital. Landmark, with five branches and $343 million in assets, lost $9.7 million through Sept. 30, according to Federal Deposit Insurance Corp. data.
In an effort to both obtain the needed capital and satisfy regulators, Landmark sought $15 million in a common stock offering it launched last year. These investments, for a potential $6.3 million, stem from that offer.
Bank officials declined to comment on specifics in the letter and wouldn't elaborate on where the funds come from. One entity, called only a “highly reputable investment group,” plans to invest $4.5 million. A second entity, a “Sarasota area investment group,” committed $1.8 million.
The investments are “final” shares, the letter states. That means the bank must find investors for the remaining $8.7 million to finalize the initial investments.
On that front, Tom Quale, Landmark president and chief executive, is refreshingly confident, given the dearth of bank investors around. “These letters of intent are just two of many we have been negotiating,” Quale said in the letter. “Others of similar magnitude are expected to follow.”
Moreover, Quale said the bank's board of directors is also putting money into the bank, with an investment worth at least $1 million. “The $15 million offering is fully subscribed to a broad range of investors, including a significant commitment from the current board of directors,” says Quale in a statement to the Review. “As a safeguard, we are continuing to accept subscription agreements on a standby basis until all parties complete their due diligence.”
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