WASHINGTON (Reuters) – Private equity investor J. Christopher Flowers has been cleared by U.S. regulators to buy a small bank in Missouri and could use the purchase as a base from which to acquire other banks.
The Office of the Comptroller of the Currency gave approval for Flowers to acquire First National Bank of Cainesville in a letter dated Aug. 27 and posted on the regulator’s website.
Initially, Flowers intends to operate the bank, which has about $14 million in assets, as it is now.
But as opportunities occur, Flowers and a new board would evaluate expansion options that likely would significantly change the business lines, asset composition, funding structure and size of the Bank, said the regulator’s letter.
“While plans to expand the business of the Bank have not been finalized, such expansion may occur by means of internal growth or through the acquisition of troubled or failed depository institutions,” the letter said.
Flowers is the billionaire investor who founded the J.C. Flowers & Co private equity firm.
The U.S. Federal Reserve on Monday relaxed some rules regarding minority shareholder investments in banks, in a move that could encourage investments by private equity and other firms.
The eagerly awaited guidelines bring greater clarity to defining limits for investors that want to buy sizable stakes in banks, but do not want to own so much of a bank that they are subject to U.S. banking regulations.
Key changes in the guidelines include allowing an investor to buy up to a 15 percent voting stake instead of the previous 9.9 percent limit. Investors can also buy up to 33 percent total equity interest, including voting and non-voting shares, instead of the 25 percent prior limit. (Reporting by Tim Dobbyn; Editing by Gary Hill)