Delmarva Bancshares secures $11M in private placement
Cambridge, Maryland-based Delmarva Bancshares Inc raised $11 million in a private placement. Delmarva Bancshares is the bank holding company for the National Bank of Cambridge. It serves clients located on the Eastern Shore of Maryland and Delmarva Peninsula through the National Bank of Cambridge, its wholly-owned subsidiary.
The website American Banker reported that the firm was able to sell common and preferred stock to a group which included Castle Creek Capital, a firm that specializes on recapitalization, growth equity and buyout investments of community banks based in the US.
Delmarva Bancshares said it intends to contribute majority of the capital to the National Bank of Cambridge so that the latter would be able to divest most of its problem assets and put the bank on track to profitable growth in the future.
In a statement, Delmarva Bancshares Chairman and President Kim C. Liddell said, "We are extremely pleased that we were able to consummate this transaction in a timely manner. We believe this new capital will enable us to execute our strategic plan, which includes significantly reducing non-performing assets, resolving the Bank's Formal Agreement with the OCC, and positioning the Bank to take advantage of market opportunities on the Eastern Shore."
Citing a filing with the Federal Deposit Insurance Corp, the report said the bank earned $195,000 in the first nine months of 2013. As of September 30, nonperforming assets of the bank comprised 10.11% of the bank's total assets, according to Liddell. However, Liddell did not talk about the number of assets that the lender would sell. He did say that a dramatic difference is going to be seen after the sales.
The placement agent for Delmarva Bancshares for the transaction was Raymond James & Associates Inc while the legal counsel to Raymond James was Alston & Bird Llp. For the transaction, the legal counsel for Delmarva Bancshares was BuckleySandler Llp.
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