Pac Premier
Giving Guide
You are here:  Home  >  Current Article

Concordia puts 20% stake in Harrington

By   /   Sunday, January 18th, 2009  /   Comments Off on Concordia puts 20% stake in Harrington

    Print       Email

Solvang-based Harrington West Financial Group, the holding company for Los Padres Bank and its division Harrington Bank, announced Dec. 30 that it completed the second closing of its private placement of shares of common and preferred stock to Beverly Hills-based Concordia Financial Services Fund.

As a result of the second closing, Concordia now owns 20.1 percent of Harrington West, assuming the full conversion of its preferred shares into common stock, said Craig Cerny, Harrington West chairman and chief executive officer.

Harrington West sold $10 million of equity capital to Concordia on Sept. 26 to take place in two closings; $6.7 million of this capital was in common stock and the remaining $3.3 million was in preferred shares.

“Concordia welcomes the opportunity to serve as the lead investor in this capital raising transaction and to work with HWFG’s board and management team,” Steven Canup, Concordia managing partner, said in a release. “We believe that the new capital, combined with the strong franchise and credit culture of Los Padres Bank, will enable HWFG to profitably expand its operations in this unique environment.”

In the second closing, Concordia purchased 581,232 shares of common stock at $6.25 per share and 78,243 shares of Series A, non-cumulative perpetual preferred stock at $25 per share with an 8 percent annual dividend convertible into 4 shares of common for $5.6 million in total consideration.

“The alliance with Concordia affords us the opportunity to capitalize on the many community banking opportunities presented by the current environment and assists us in our controlled de-novo banking center expansion in multi-markets,” Cerny said.

President William “Butch” Phillips said things around the bank will be business as usual.

Cerny added that although Concordia now owns a portion of Harrington West, Concordia is “a passive and supportive investor in HWFG,” adding that the bank’s business plan and management team will remain unchanged.

The second closing was contingent upon two conditions: Concordia’s agreement with the Office of Thrift Supervision on its rebuttal of control application, and Harrington West’s receipt of shareholder approval of the second closing. Both conditions were satisfied in December, Phillips said.

“One of the NASDAQ conditions is to receive shareholder approval when more than 20 percent of the company’s currently outstanding and issued shares are sold,” Cerny said. “Along with Concordia’s $10 million equity purchase, we also sold $1.4 million of the convertible preferred shares to HWFG directors and other investors on Sept. 26. We received shareholder approval of this condition on Dec. 3. We needed 50 percent plus 1 share of the outstanding and issued shares for approval, and we satisfied that requirement by a wide margin.”

The vote count will not be disclosed until Harrington West files its annual report, which Cerny said is expected in March.

This second closing follows an original closing on Sept. 29, when Concordia purchased 458,768 shares of common stock and 61,757 shares of Series A preferred stock on the same terms for $4.4 million in gross proceeds.

Harrington West Financial Group is a $1.2 billion diversified financial institution holding company for Los Padres Bank and its division Harrington Bank. The company also owns Harrington Wealth Management Company, a trust and investment management company with $182.7 million in assets under management or custody.

Concordia Financial Services Fund is a private equity fund focused on making value added and cooperative investments exclusively in the financial services sector. The fund, started by Canup and Kelvin Lee, is managed by Beverly Hills-based Concordia Capital Advisors.

Are you a subscriber? If not, sign up today and get four free issues of the Pacific Coast Business Times!

    Print       Email