Horizon hires firm to raise capital

BRADENTON — Horizon Bank, under deadline to meet enforcement orders from federal regulators, has hired a Santa Monica, Calif.-based financial firm to help it raise capital.

Charlie Conoley, president and chief executive officer of Horizon Bank, announced in a filing with the U.S. Securities and Exchange Commission on Wednesday that Cappello Capital Corp. plans to help the Bradenton bank recapitalize.

Horizon Bank, which received a prompt corrective action directive in March, also announced in the SEC filing that federal regulators on June 16 gave the bank 90 days to recapitalize or risk further regulatory action, including the risk of closure.

The bank, which has been designated as critically undercapitalized, is counting on Cappello Capital Corp. to help the bank come into compliance with undisclosed capital ratios required by the Federal Reserve.

Horizon Bank has previously estimated it would have to raise a minimum of $7 million to $8.5 million to become adequately capitalized.

According to the SEC filing, Cappello Capital Corp. plans to help Horizon Bank raise $15 million to $25 million through a common stock offering.

“We expect to have a quick and successful capital raise,” Conoley said. “Our feeling is that we should be hitting our minimum capital requirements at least before our 90 days is up. But I do not see the bank being closed down in 90 days. I don’t think the intent of the regulators, as long as we show them continued progress, is to close the bank.”

As of June 30, Horizon Bank’s total assets were $187.9 million, down from $204.3 million as of June 30, 2009. Total deposits were listed at $164.5 million, down from $172.4 million through June 30, 2009.

Conoley said investment banks recommended Horizon Bank contract Cappello Capital Corp. to assist with its capital issues. Neil Morganbesser, managing director at Cappello Capital Corp., could not be reached for comment Thursday.

The California firm assists private and public companies with private placements of equity and debt as well as with mergers and acquisitions.

Cappello also was hired by AmericanWest Bankcorporation to assist with the Spokane, Wash. bank’s recapitalization plans.