74.3 F
San Diego
Friday, Sep 30, 2022

Bank Sale in Limbo as Shareholders Hold Out for Higher Price

The pending sale of Coronado First Bank to Embarcadero Bank could be on the rocks or it may be on track. But in the absence of any information from the two entities, rumors have been flying.

The deal definitely appears to be in jeopardy, given the fact that a special meeting to obtain shareholder approval from Coronado First had to be postponed for a second time.

The first time CFB shareholders met June 16, they didn’t vote because a new price was being negotiated. The new date was set for July 28, but that’s been delayed until late August.

Renee Hinton, CFB senior vice president, said the new special shareholders’ meeting was delayed to “late August, but we don’t have a date yet.”

- Advertisement -

Her boss, CEO Bruce Ives, was on vacation, and Chairman Barbara DeMichele didn’t return a call.

When the sale was first announced in March, it called for Embarcadero to pay Coronado First shareholders $6.70 per share or its tangible book value, which appeared a fair price given the fact that CFB has never made a profit and holds a sizable chunk of problem assets.

But apparently, a contingent of CFB shareholders of the $83 million-asset bank thought they were getting shortchanged and demanded a better price, resulting in further negotiations and the need for another proxy report.

Following the meeting, DeMichele said she was unable to reveal what the higher price was because the proxy report had yet to be filed. That was more than five weeks ago and it still hasn’t been filed, according to sources.

Maria Kunac, chief executive of Embarcadero, said in June that the offer price would be modified, but also declined to say what it was.

Kunac also didn’t return calls for


Rick Levenson, a market maker for Coronado First through private equity firm Western Financial Corp., said the lack of information on the transaction is causing a lot of speculation.

“I probably got three or four calls about it from various people who want to know what’s going on,” said Levenson, who manages a small portion of shares in Coronado First for a few limited partnerships. “This (lack of information) is creating a lot of uncertainty.

“What I don’t understand is that if they (Embarcadero Bank) made a revised offer, then why don’t they put out a press release saying that?”

Calls to both banks’ board members were not returned.

Looking at how the market is viewing CFB stock, which is traded on the OTC Bulletin Board under CDFB.OB, there seems to be a lack of confidence in the transaction consummating because the price has never got close to the proposed offer.

A few days before the announcement on March 22, a cluster of shares traded hands that pushed CDFB from $3.25 to $5. After the news, it went up to $5.15 but no higher. As of July 15, CDFB was stuck at $5, which means the bank is worth $6.9 million on the market instead of the original aggregate price of $9.3 million.

If the deal is ever consummated, the new entity, which would be called Coronado First Bank, would still be only about $156 million in assets, one of the area’s smallest. Yet the community bank would have loads of capital and, presumably, be in a much better position to grow.

• • •

Vibra Bank Continues Looking Vibrant: While many lenders remain uber-cautious about extending credit, Chula Vista-based Vibra Bank is expanding its portfolio at double-digit rates.

The single-office bank that opened only three years ago this month reported its loans grew 17 percent from mid-2010 to $57.6 million.

Net profit for the second quarter was $329,000 compared with a net loss of $119,000 for the like quarter of 2010. For the half, net profit was $464,000, compared with a net loss of $393,000.

Total assets at June 30 were $77.8 million, compared with $62.3 million in the like quarter of last year.

CEO Scott Parker said the bank is lending to small businesses, many of them owned by Hispanics, and achieving positive results even in a marginal economy.

Vibra’s capital levels remain robust with its Tier 1 leverage ratio at 14.4 percent, above the 11 percent required of most de novo banks.

• • •

Small Change: Security Business Bank of San Diego named William Ruh to the company’s board of directors. Ruh is a co-founder of Castle Creek Capital LLC … Last week, Chase Bank said it planned to hire 400 people to staff 12 new branches it will open this year to bring its total to 103 branches, second only to Wells Fargo Bank which has 104 branches.

Send any news about locally based banks to Mike Allen via email at mallen@sdbj.com. He can be reached at 858-277-6359.


Featured Articles


Related Articles