Although they are eager for growth, San Diego's community banks have been thwarted in their attempts to acquire Grossmont Bank, the area's largest community bank, which is up for sale.
Officials at Grossmont, based in La Mesa, said a deal to sell the bank will probably be signed in the next 30 days, but they would not disclose the price or the buyer being considered.
Several community bankers in San Diego said the asking price for Grossmont is too high. They predict Grossmont will be sold to a much larger acquirer, most likely First Interstate Bank of Los Angeles.
The bankers said Grossmont's premium and the bleak prospects for raising capital to purchase the bank counted out San Diego's shrunken cadre of community banks.
"Several of the banks here wanted to buy it, but turned it down because of the high premium," said a banker who hoped to acquire Grossmont.
San Diego's community banks were decimated by the state's recession of the last four years. A half dozen either failed or were acquired, and several more are still limping.
First Interstate bought San Diego's largest bank, San Diego Trust, last year, and the city's remaining community banks are hoping to grow through acquisition to better compete in the market.
Grossmont is 100% owned by Bancomer, Mexico's third-largest bank. It bought Grossmont in 1982, according to Grossmont president Allan Severson. When Bancomer was privatized in 1991, it had to file a change of control application with regards to Grossmont with the Federal Reserve. That application has never been acted on, effectively barring Bancomer from controlling Grossmont.
The Fed's inaction contributed to Bancomer's decision to sell Grossmont in December, Mr. Severson said.
"Bancomer felt some frustration over that," he said. "They also thought that nonbanking activities were more aligned with what their strategies were in the United States, instead of owning a small bank in San Diego."
