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Trinity Capital Corporation Announces Agreement For Proposed $52 Million Equity Recapitalization and $10 Million Rights Offering
Posted: 09/08/2016 | Castle Creek

LOS ALAMOS, N.M.–September 8, 2016–Trinity Capital Corporation (the “Company” or “Trinity”), parent company of Los Alamos National Bank (“LANB”), announced Thursday that it has entered into a stock purchase agreement with Castle Creek Capital Partners VI, L.P. (“Castle Creek”), Patriot Financial Partners II, L.P., Patriot Financial Partners Parallel II, L.P. (together with Patriot Financial Partners II, L.P., “Patriot”) and Strategic Value Bank Partners, LP (“SVP, and collectively, the “Investors”), pursuant to which it expects to raise aggregate gross proceeds of approximately $52 million at an offering price of $4.75 per common share and $475.00 per share of a new Series C non-voting mandatorily convertible non-cumulative preferred stock. The securities offered will not be registered under the Securities Act of 1933, as amended, or the securities laws of any state, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The Company intends to use the net proceeds of the offering to repurchase at par, plus all deferred dividends, 100% of the Company’s outstanding Series A and Series B preferred securities originally issued under Treasury’s Capital Purchase Program, bring current the deferred interest on the Company’s four series of trust preferred securities (“TRUPS”) and for other general corporate purposes.

Completion of the transactions contemplated by the agreement is contingent upon customary closing conditions, including the respective parties receiving regulatory approvals and non-objections, as appropriate.

Each of Castle Creek’s and Patriot’s investment will represent a 9.9% voting common ownership interest and an additional ownership interest of the Series C preferred stock described above which will convert to shares of non-voting common stock upon the authorization of such securities by existing shareholders.  The Company intends to timely seek shareholder approval for the authorization of non-voting common stock at its next annual shareholder meeting.

Upon closing of the offering and receipt of regulatory approvals, each of Castle Creek and Patriot will be entitled to have one representative appointed to both the Company’s and LANB’s board of directors.

Chairman Jerry Kindsfather said, “We are looking forward to the financial and strategic flexibility this new capital will bring us, as well as the additional expertise our Board of Directors will gain with the inclusion of the Castle Creek and Patriot representatives.”*

Company President and Chief Executive Officer John Gulas stated, “We are encouraged that our new investors have confidence in our turnaround efforts.  We, and they, believe that this new capital enables us to address the most difficult remaining challenge in restoring the Company to a safe and sound condition.”

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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.