After two and a half years, San Francisco's Pacific Bank has shed a federal consent order - a move that will likely be one of the final passages in a difficult recovery.
Officials at Pacific have said the $357 million-asset bank is up for sale.
The Office of the Comptroller of the Currency on Tuesday lifted the consent order, which was imposed in February 1993 to force the bank to lift its capital ratios.
The bank, after raising money last year and drastically shrinking the size of its balance sheet and expenses, more than met the agency's requirements. Its leverage capital was a whopping 15.6% of total assets on June 30.
"As a result of continuing improvements in our operations, profitability and our substantial capital position, the bank is on solid ground to pursue its plans to grow profitably," chairman Norman E. Dean said in a press release.
Mr. Dean and other bank officials were away and could not be reached for comment.
Mr. Dean was hired in early 1993 when the bank was on a downward spiral from huge losses in commercial real estate. At one point in 1993 it had the highest ratio of nonperforming assets to total assets of any bank in California.
Mr. Dean raised more than $50 million in capital in December 1993, after he had halved the bank's asset size and gotten rid of a two-thirds of Pacific's staff.
Early this year, Pacific signed a letter of intent to be acquired by Western Bank of Oregon. The companies later called off the deal, citing a lack of synergies and inadequate financing. But in the aftermath, Pacific was put squarely on the block.
Hoefer & Arnett, a San Francisco investment banking firm, has been retained to advise the bank on a possible sale. Pacific's two biggest shareholders are Western's chairman, Georges S. St. Laurent, and Singapore businesswoman Cheong Swee Kheng, each of whom owns at least 9.9%.
The bank's most valuable asset is its specialty in international banking for midsize companies doing business on the Pacific Rim. It has offices in Los Angeles, the Cayman Islands, and Hong Kong.
Mr. Dean also announced that he was relinquishing his chief executive job to Michael Tun Zan. Mr. Dean will remain on the board as chairman.
