October 9, 2015
Boston, MA – Radius Bank, the community bank with $780 million in assets serving unions, non-profit organizations, small and middle market businesses and government entities, has announced a new restructuring deal that the northeast-based financial institution is confident will enable it to not only better serve the labor market, but also expand into new sectors and offer more products and services.
According to an announcement made this week, Radius Bancorp and its current owners have entered into a definitive agreement in which new investors will acquire about 95 percent of Radius Bancorp for approximately $63 million.
Roughly $18 million of that amount will be an investment for new equity capital of Radius Bancorp. Patriot Financial Partners, GCP Capital Partners, Endicott Management Company, and BayBoston Capital, as well as members of the bank’s management and board of directors are leading the transaction.
Bank officials say the new deal achieves two primary objectives: add growth capital for expansionary purposes, and resolve a regulatory issue for its current ownership group by divesting their control of the Bank.
“This recapitalization is an outstanding result for our current ownership group, our clients and employees,” Radius Bank President and CEO Michael A. Butler said in a statement. “Being able to satisfy our owners’ regulatory requirements while simultaneously adding growth capital that allows us to better serve our clients and remain an independent community bank is the best possible outcome. We have chosen the right partners to help us profitably grow and look forward to welcoming them to the ownership team.”
Over the past several years, the bank’s current ownership group, the New England Carpenters Pension and Annuity Funds and the Empire State Carpenters Pension Funds, have worked with Radius’ management team to bring in new investment partners following the adoption of the Dodd-Frank Act, which prohibits savings and loan holding companies, such as the carpenter pension funds with respect to Radius Bank, from holding the types of investments that are part of the carpenter pension funds’ ordinary business. The architects of the deal say that the transaction will bring in new growth capital and resolve this issue, while allowing the Carpenter pension funds to continue to retain a small ownership stake in the bank.
“This solution achieves the ownership group’s objectives,” said Mark Erlich, executive secretary-treasurer for the New England Regional Council of Carpenters. “The transaction will also be a positive result for both the carpenter pension funds and the bank. “We are pleased to be able to support the bank as it grows in the future in its new form.”
The additional capital to be provided by the transaction will support the bank as it continues to execute its strategic plans across its commercial, institutional, virtual and retail lines of business. The capital will also allow the bank to continue serving these key client markets at a high level, while remaining an independent community bank.
The transaction is still subject to customary closing conditions, including regulatory approval, but is anticipated to close in the first half of 2016.