Attached files
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| 8-K - CASCADE BANCORP | v203117_8k.htm |
| EX-99.2 - CASCADE BANCORP | v203117_ex99-2.htm |
November
16, 2010
NEWS
RELEASE
FOR
IMMEDIATE RELEASE
|
CONTACT:
|
Patricia
L. Moss, President & Chief Executive Officer, Cascade
Bancorp
|
|
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(541)
385-6205
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Gregory
D. Newton, EVP, Chief Financial Officer, Cascade
Bancorp
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(541)
617-3526
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CASCADE
BANCORP (OREGON) ANNOUNCES
AGREEMENTS
FOR $177 MILLION CAPITAL RAISE
David
F. Bolger and Lightyear Fund II, L.P. Extend Securities Purchase
Agreements;
Affiliates
of Leonard Green & Partners, L.P. and WL Ross & Co. LLC
Enter
into New Securities Purchase Agreements
Investments
to Restore Capital Levels and Facilitate Long-Term Growth
Company
to Effect 1 for 10 Reverse Stock Split Prior to Closing
BEND,
Ore., November 16/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.
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