Coast Bancorp has raised $6.8 million through a private placement of debt and equity, a capital infusion that the San Luis Obispo-based banking firm said will be used for future growth as it turns the corner toward profitability.
The parent company of Coast National Bank said the raise included 4.8 million shares of common stock plus $2 million of private lender senior notes. In April, federal banking regulators lifted a consent order that had been placed on the bank in 2011.
The bank is now focused on becoming profitable again, said CEO Anita Robinson. “Once the credit quality issues were significantly improved, the focus then shifted to operational efficiencies and profitability,” she said in a statement on Thursday. “The bank is now poised to grow and take advantage of changes in the local banking market as one of the few remaining community banks in San Luis Obispo County.”
With assets of $123 million as of March 31, Coast National is the smallest community bank based in the region and it has struggled with asset quality and capital levels in recent years. It posted losses every year from 2008 to 2012, totaling $16.4 million, before posting a $1 million profit in 2013.
In 2012, Coast National sold its Morro Bay branch and $30 million in assets to Paso Robles-based Heritage Oaks Bancorp.
“The new Coast National Bank emerges with a fresh perspective on what it takes to be a successful community bank,” Robinson said. “The commitment to our community never faltered and remains as steadfast as ever. We are looking forward to implementing our strategies to build out the bank and service our community. The focus will be to continue to grow our small business lending, which has always been one of our best attributes. As the bank emerges from the storm, it is revitalized and excited about the future.”
The offering was primarily to accredited investors, Coast National said, the FIG Partners, acted as sole placement agent.