San Diego - First National Corp. said it and its wholly owned subsidiary, First National Bank, will receive a capital infusion of $8 million from a private investor group.
Additionally, the company announced a loss of $1.3 million, or 37 cents per share, for the second quarter, compared with a loss of $19.9 million, or $5.58 per share, for the same quarter in 1992.
The California company said Monday it signed a definitive agreement to issue new shares of common stock to investors led by John W. Adams and Jeffrey A. Smith. When the shares are issued, the investors will own 96% of the bank's issued and outstanding common stock, while the bank's interest will drop to 4%.
Although most of the members of the investor group have yet to be identified, the lead investors have conditioned their purchase on the participation of Malin Burnham and Robert D. Richley, the chairman and chief executive officer of both the company and the bank, respectively.
First National Corp. said that even with the recapitalization, it will remain in default on $7 million of debt to Bank of America.