Oregon Public Broadcasting

The parent company of Bank of the Cascades has extended agreements with two private investors to take a $65 million stake in the company. The deal requires Cascade Bankcorp to raise an additional $85 million in capital. This is the second deadline extension for the bank to raise that money. David Nogueras has more.

One of the potential investors is David Bolger of New Jersey. Regulatory filings show Bolger already has a significant stake in Cascade resulting from a 2006 merger with Idaho based Farmers and Merchants Bank. The other investor is Light Year Capital, a New York based private equity fund.

Bill Valentine is President of Valentine Ventures, a Bend-based investment management company. He says the most likely way for Cascade to raise the required cash is for the bank to issue more shares of its stock. But for the bank to do that, he says Cascade must first find someone to buy it.

Bill Valentine: "If they were to simply increase the number of shares outstanding, it would take the number of existing shares and cause the value to drop by half, because people would say, 'you haven't gotten that money to the outside.  You're just putting more shares out to the marketplace'."

Valentine says the most likely buyer would be an institutional investor, such as a mutual fund or a pension fund.  The new contract gives the bank another two weeks to raise the money.