In a rare industry move, 16 banks raised enough capital to ensure that Pan American Bank, a financial institution that has served the Hispanic community for 50 years, remained open for business.

Founded in 1964 by the former United States Treasurer Romana Banuelos, the $41 million Pan American Bank in Los Angeles fell on hard times as a result of the Great Recession, according to bank officials.

The community development financial institution serves the Latino and immigrant communities in Southern California and is an active lender in the small business and consumer markets.

Pan American Bank entered into securities purchase agreements to raise aggregate gross proceeds of $6.3 million through the sale of approximately 16.6 million shares of voting common stock and 109.4 million shares of non-voting common stock, the bank said Tuesday.

This recapitalization will increase the bank's Tier 1 Leverage Ratio to 15.2%, providing the needed funds to solidify the bank's capital structure and support future growth, according to Pan American Bank.

This unique stock offering was subscribed to by a number of Pan American's peers including:

• Banc of California, National Association
• BBCN Bank
• Cathay General Bancorp
• Commercial Bank of California
• CTBC Bank Corp.
• Grandpoint Bank
• Hanmi Bank
• Heritage Oaks Bancorp
• HomeStreet Bank
• MUFG Union Bank, N.A.
• Pacific Premier Bank
• Pacific Western Bank
• Preferred Bank
• Provident Savings Bank, FSB
• Western Alliance Bank
• Wilshire Bank

“As we celebrate our 50th year in banking, we are very excited about raising fresh capital and re-launching our bank,” said Mona Banuelos, trustee of the Banuelos Family Trust and a long-time director of the bank. “My mother founded this bank with the dream of providing vital services to our under-served communities.”

The Banuelos Family Trust remains the largest shareholder of Pan American Bank, Banuelos said.

Concurrent with the recapitalization, the bank's board of directors entered into a six-month contract with Robb Evans, of REA Consulting LLC, to act as interim CEO. Evans, a banking industry veteran and past president of the California Bankers Association, will initiate a search for a new president, a position that has been vacant since April of this year. The board also elected Evans as a director and chairman of the board.

“It is rare that a group of bankers have rallied to save one of its peers, especially a group as widespread and diverse as the 16 banks that came together in this transaction,” said John Eggemeyer, board chairman of PacWest Bancorp and president/CEO of Castle Creek Capital LLC.