Western Independent Banker - March/April 2009 - (Page 25)

By Joshua Siegel By Alison Davis Private Equity: Another Capital Option Belvedere Capital: Private Investors Providing Capital BELVEDERE CAPITAL, FOUNDED in 1994, is one of the only private equity firms in the U.S. that focuses on investing in community banks and is structured as a bank holding company. Belvedere actively seeks investment opportunities that are underappreciated by other investors and have operating potential over five to seven years that can be uniquely unlocked through Belvedere’s capital and oversight. The current market environment is creating opportunities for many community banks and exceptional opportunities exist to invest in the sector. It also is important to understand the challenges faced by bank CEOs and the need for support beyond capital, such as attracting employee talent, driving strategic change, improving regulatory relationships, restructuring the balance sheet and evaluating growth opportunities. Consistent with that approach, two of Belvedere’s core investment strategies are single bank investments with significant operating potential (including turnarounds, public-to-private transactions, and growth investments) and depository aggregation platforms (which may include one or many subsequent acquisitions). Correctly addressing these opportunities and challenges can yield exceptional results for customers, management, employees and shareholders. No investment is too small or too large for Belvedere and there is no prescribed formula for an investment, but there are several characteristics which define great banks which are common to each of our investments: • High potential markets. Large target markets with attractive competitive landscapes and growth potential. • Profitable business model. Highly differentiated opportunity with continued on page 27 As bankers search for ways to increase capital, looking to private equity firms has become an attractive option for an increasing number of community banks. WIB asked authors from two firms specializing in this arena to give you a snapshot of two different approaches to these investments. Both firms have investments in WIB member banks. Considerations for Non-Control Private Equity Investors During a Credit Crisis I’M WRITING THIS article from seat 12D on what is now our second flight this evening from Atlanta. On my way to Arizona to speak at the CSBS (Conference of State Bank Supervisors) symposium, the first attempt to depart began with a rather frightening tire explosion on takeoff. The plane landed back in Atlanta, after hours of circling to decrease the fuel load, and was met by the 9th Battalion of emergency service vehicles. Fortunately, the 9th Battalion was not needed as the pilots were able to land the plane safely, and emergency preparations kept all the passengers safe. continued on page 26 Private equity investors are looking for one of two types of investments: (1) inexpensive banks that require restructuring, substantial capital and replacement of management, or (2) well managed banks that can weather difficult markets and gain market share when other competitors are floundering. You do not want to be the first type of bank. Western Independent Banker March/April 2009 25

Table of Contents Feed for the Digital Edition of Western Independent Banker - March/April 2009

Western Independent Banker - March/April 2009 Contents A Message from the President & CEO Profitable Liquidity: Yes, You Can Non-Performing Assets: The Keep Versus Sell Decision Is BOLI the Way to Go? The Troubled Asset Relief Program and Its Eff ect on Executive Compensation TARP Money or Not, Secondary Offerings Belong in Your Plan 52nd Annual Conference Private Equity: Another Capital Option Strengthening Your Bank’s Bottom Line by Adapting to Difficult Times Managing Your Branch Network Capital Dealing with a Hard Insurance Market WIB Service Corporation Report WIB Calendar New Members Index of Advertisers Advertiser.com

Western Independent Banker - March/April 2009

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