PE Invests in Banks Hurt by Subprime Crisis
October 30, 2009
GTCR Golder Rauner-backed PrivateBancorp (NASDAQ: PVTB) has raised $164.3 million through a public offering of 19.3 million shares at a price of $8.50 per share. The offering included $35.3 million from GTCR that, when combined with an additional purchase of non-voting stock, will raise GTCR's stake in the bank to more than 13%. The Chicago-based bank posted a loss of $31.2 million in the third quarter and increased its loan loss reserves by $90 million to a total of $192.8 million.
Private equity firms have invested almost $5 billion in 28 other regional banks in the past three years, according to the PitchBook Platform. Due to strict regulations over bank ownership half of those have been minority investments. Publicly held banks such as Cowlitz Bancorporation, Wintrust Financial and PacWest Bancorp have recieved a lot of this attenion with 13 PIPE investments totaling over $1 billion. PE firms have been most active in states that have been hard hit by the subprime crisis like Florida, Texas and California. These three states alone accounted for 16 of the 19 PE-backed regional bank deals cited above.