By Greg Edwards
The parent company of The Business Bank of St. Louis has raised $10 million in capital from a California fund that invests in community banks and that has ties to St. Louis.
The investor is Castle Creek Capital of Rancho Santa Fe, Calif. A Castle Creek partner, Mark Merlo, used to live in St. Louis and is a 1984 graduate of the University of Missouri-Columbia. “We’ve known him for 20-plus years,” Larry Kirby, president and chief executive of the bank, told the Business Journal.*
The proceeds will be used to strengthen the bank’s capital, reduce debt and support growth, including possible acquisitions.
Here are the details of deal, which closed Nov. 4 and has been in the works for months: Business Bancshares Inc. receives $10 million through a private placement of 203,067 shares of common stock and 392,171 shares of non-voting common stock at a price of $16.80 a share purchased by the Castle Creek Capital Partners Fund V.
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*The statement quoted above was made by an executive of a Castle Creek portfolio company.
The portfolio company executive has not received compensation for the above statement and this statement is solely his opinion and representative of his experience with Castle Creek. Other portfolio company executives may not necessarily share the same view. An executive in a Castle Creek portfolio company may have an incentive to make a statement that portrays Castle Creek in a positive light as a result of the executive's ongoing relationship with Castle Creek and any influence that Castle Creek may have or had over the governance of the portfolio company and the compensation of its executives. It should not be assumed that Castle Creek's investment in the referenced portfolio company has been or will ultimately be profitable.