Admirals Bank has officially completed its private placement offering.
The parent company of the bank announced the recapitalization in a press release earlier this week and an Admirals Bank executive told Banker & Tradesman the company has raised $26.5 million.
Sandler O’Neill & Partners LP acted as placement agent, and Covington & Burling LLP acted as legal counsel in connection with the recapitalization.
This new money brings Admirals’ capital levels well above the threshold for a “well capitalized” bank and also means the bank can now focus on charting a new path forward.
“Moving forward, we can focus our full attention on creating a new category of bank,” said Marc White, president and CEO of Admirals Bank. “This will be a customer-first, relationship-driven, and fully-integrated financial services institution designed and built to deliver a premier wealth management and banking experience.”
The capital raise has been a long time coming for the bank, which has been undergoing a huge transformation since facing significant hurdles in 2017.
That year, the bank reported more than $19 million in losses and saw former CEO Nicholas Lazares leave his post. Also in 2017, Admirals received a federal consent order and saw a plan to sell off most of the bank’s assets to a group of private bankers, which included White at the time, fall apart.
Since then the bank has brought on White, the former head of JPMorgan Chase’s Boston wealth management operations, and worked hard to cut expenses. The bank trimmed 23 percent of its workforce, subleased 30,000 square feet, or roughly half of its real estate, and reduced unnecessary tech expenses.
Those moves helped cut losses and White expects to have the bank running profitably in 2020. The recapitalization will help him get there, but under a new type of business model.
In its former days, Admirals made money using concierge banking to bring in deposits it would then use to buy pools of commercial loans on the secondary market. The new money enables Admirals to complete its vision and go in a new direction as a community bank that offers mortgages, commercial lending and wealth management, all streamlined with cutting-edge technology.
White said the bank is planning to rebrand a new name and logo in the next three to six month. The bank already has its mortgage division up and running and its commercial business is expected to launch soon, while Admirals executives are still considering how to structure the new wealth management division.
The bank, which has branches in Boston and Providence, is also seeking additional space in Boston and looking to hire some new executives including a chief technology officer.
“Customers’ banking and wealth management needs and expectations are evolving, and extend beyond the immediate household,” White said. “To effectively advise our clients, we are building a forward-thinking institution that reflects what the financial services industry is and will be – not what it was.”