First Banks, the Dierberg family-owned banking business, has attempted to weather the credit crunch currently hitting the US banking sector by undergoing a $100 million recapitalisation.
In a very public demonstration of support for the Missouri-based bank, the Dierberg family, through their First Capital America business, has contributed $100 million to shore up $104.1 million in non-performing loans and assets.
The bank, chaired by family patriarch James Dierberg, established a majority-owned subsidiary in May to hold these bad assets with a view to liquidating them at a more economically advantageous time.
Terrance M McCarthy, president and chief executive officer of First Banks, said: "The investment provides the company with the strength to manage through the current difficult economic cycle and positions us to take advantage of future opportunities as the economy recovers."
First Banks has been haemorrhaging money in 2008, a trend that it blames on the country's subprime crisis. It reported a net loss of $39.9 million in the second quarter, which is an increase of $35 million on Q1. A net loss of $44.8 million was recorded for the six months of 2008, compared with earnings of $34.8 million for the same period in 2007.
The Dierberg family controls all of the voting stock of First Banks through various trusts created by and for the benefit of members of the Dierberg family. The family also owns and runs Dierbergs Markets retail chain, which was founded in 1854.
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