Franklin Resources Inc., parent of Franklin Templeton Investments, is in talks to boost its stake in First Chicago Bancorp, which owns $1.08 billion-asset First Chicago Bank & Trust, to 19 percent, according to documents filed with the Federal Reserve Bank of San Francisco.
Franklin is already an investor in First Chicago, but the bank’s key shareholder has long been California-based private equity firm Castle Creek.
Two Templeton funds are proposing to buy up to $8.5 million of First Chicago’s preferred stock. That would give it a 19 percent stake. It’s believed that Franklin currently owns about 15 percent of First Chicago.
First Chicago Chief Executive Mikesell Thomas would say only that the bank expects to complete an offering of equity securities in coming weeks, though he cautions that the terms are subject to change.
Most of the bank’s previous capital raises have come from Castle Creek. In August, First Chicago Bancorp said it issued $25 million of new stock to investors, and was finalizing negotiations for issuance of additional stock in the third quarter. In September 2009, it issued $43.5 million of stock.
The Franklin news was first reported by SNL Financial.
Fed documents show that other First Chicago investors include: PPM America Private Equity Fund II, JPMorgan Chase, Ariel Capital Management, OneBeacon Insurance and CVF LLC, a Chicago-based venture capital firm affiliated with members of the Crown family.
In the first nine months of 2010, First Chicago lost $31.4 million, compared with a loss of $40.2 million in the same period in 2009.
byerak@tribune.com
