Moelis Capital Partners LLC, the private-equity arm of Kenneth Moelis’s boutique investment bank, and Angelo Gordon & Co., which raised $1.1 billion to invest in distressed assets, are seeking stakes in banks as buyout firms intensify efforts to control faltering lenders.
Funds tied to Moelis Capital applied to buy control of Opportunity Bank, a Texas lender with assets of $64 million, according to the Federal Reserve’s website. Angelo Gordon aims to acquire about 24.9 percent of Hamilton State Bancshares Inc., with $277 million of assets, according to the bank and the Fed.
The deals are the latest evidence that private-equity investors are shifting tactics as they bid for struggling banks. The FDIC has been reluctant to sell failed lenders to private investors, in part on concern that they may take too much risk with insured deposits. Instead, firms including Carlyle Group and Thomas H. Lee Partners LP are offering capital to prop up banks that are still open.
“Regulators have made it very difficult for private equity to come into the banking system,” said William Isaac, chairman of Fifth Third Bancorp and former head of the Federal Deposit Insurance Corp., in a June 4 interview. “There are definite advantages” given to strategic buyers, or existing institutions that purchase failed banks, he said. The FDIC typically will offer seized banks to healthy, operating banks.
Moelis Capital would gain its stake in the Richardson, Texas-based lender by buying more than 10 percent of the shares of Opportunity Bancshares Inc., the bank’s holding company, and indirectly controlling Opportunity Bank, according to the Fed.
Rohini Pragasam, a spokeswoman for Moelis & Co., declined to comment. A call to Mike Nichols, chief financial officer at Opportunity Bank, wasn’t returned.
Angelo Gordon, together with Tailwind Capital LLC, plans to invest at least $90 million in Hamilton State, based in Hoschton, Georgia, according to a statement from the lender. Hamilton State will then seek more distressed banks to buy,
Hamilton offers commercial banking for small- to medium-sized businesses at six branches in north Georgia, the statement said. Proceeds from Angelo Gordon and New York-based Tailwind will be used to pay back Hamilton’s $7 million of U.S. bailout funds and shore up capital.
After that, the bank may seek “failed or distressed depository institutions in FDIC-assisted transactions,” said the statement.