After months of raising capital intended to purchase assets from Admirals Bank and launch a new institution called Bank & Trust Co. of Boston, the banking executives behind the venture are pulling out of the deal.
“After careful deliberations and review, First Boston Holdings will not be acquiring Admirals Bank,” Joe Baerlein, spokesperson for Bank & Trust’s holding company First Boston Holdings, said in a statement. “The senior management of First Boston Holdings will not be considering other strategic acquisitions. We wish Admirals Bank the very best in their future endeavors.”
Mark D. Thompson, formerly of Boston Private, had been chosen to lead Bank & Trust.
Also said to be joining Thompson at Bank & Trust Co. was John J. Sullivan, a former executive vice president at Boston Private, William J. Shea, former vice chairman and CFO at Bank of Boston and current board chairman of Demoulas Supermarkets.
Sullivan was going to become executive vice president and chief banking officer, and Shea was slated to become chair of the new bank’s board.
Rocco J. Maggiotto, former global leader of PwC’s Financial Services Practice, and Anthony A. Nickas, a cofounder and managing partner of First Atlantic Capital, were also planning to join the board.
On behalf of First Boston Holdings, Thompson in October issued a statement that said Bank & Trust Co. would offer full banking services with an emphasis on individuals and families, the not-for-profit sector, small and medium sized businesses and professional service firms.
“Boston is changing, with a fresh influx of young people who are creating wealth and need a financial institution to help them grow and preserve their wealth,” Thompson said in the statement. “Boston is a growing, innovative economy that needs a new bank to help provide capital to individuals, families and our business community. Bank & Trust Co. of Boston will be a true 21st century bank for these client relationships.”
Thompson and the other executives set out to raise $70 million in capital to maintain the two locations Admirals Bank already has in Back Bay and Providence, and then further expand into the Seaport District after the deal was complete.
But in April, the U.S. Office of the Comptroller of the Currency issued a cease-and-desist order to Admirals Bank for an unknown reason, although news that the acquisition was off was not made public until last Friday.
An OCC spokesperson said the agency does not comment on specific banks or enforcement actions beyond what is posted on its website. Admirals Bank CEO Nicholas Lazares could not be immediately reached for comment.
The order on the website said that Admirals must establish objectives for the bank’s overall risk profile, liquidity, earnings performance, growth, balance sheet mix, off-balance sheet activities, liability structure and capital adequacy.
It also said that total capital must be at least equal to 13 percent of risk-weighted assets, and that Tier 1 capital must be at least equal to 9 percent of adjusted total assets.
Among other measures, the cease-and-desist order required Admirals to take a number of risk management steps and create a conflict of interest policy.
As of the end of March this year, Admirals had over $425 million in total assets, according to the FDIC, down about $13 million from the same time in 2016. The company lost over $5.7 million in 2016.
