Gaylon Lawrence has secured regulatory approval to boost his stake in a Nashville, Tenn., bank.
The Federal Reserve notified CapStar Financial's lawyers in a letter on Tuesday that it had approved Lawrence’s application to own up to 15% of the company. The Fed determined that the request to buy more stock would not result in a monopoly or a reduction in competition.
The $1.4 billion-asset CapStar had urged the Fed to oppose Lawrence’s effort to own more stock. The company also filed a lawsuit last year arguing that Lawrence and the Lawrence Group, the umbrella company he owns, was pursuing an illegal takeover.
The Lawrence Group includes a 75-year-old farming operation across five states, a stake in a California HVAC distributorship, Heitz Wine Cellars in Napa Valley, Calif., and seven community banks with 31 branches in northeast Arkansas, southeast Missouri and Tennessee, according to the Nashville Chamber of Commerce.
In its letter, the Fed included several stipulations to create distance between Lawrence's banking and nonbanking businesses. For instance, his nonbank entities are not allowed to own, control or have voting power at any bank.
The stipulations “are intended by the Fed to impose a firewall between Lawrence's banking businesses and his nonbanking businesses and are the result of our assertions that they were impermissibly mixed,” Claire Tucker, CapStar's CEO, said in a statement.
“According to his public filings, Mr. Lawrence remains a significant shareholder of the company," Tucker added. "We are not aware of any plans he may have for his stake in our company apart from what he's stated in his SEC filings.”
