Bank of San Francisco repudiated its latest strategy for survival Wednesday by announcing a new management team and another capital infusion from its principal investor to help it meet regulatory requirements.
The announcement came as the bank's parent reported a second-quarter loss of $4 million, or 48 cents a share. Bank of San Francisco, which was founded in 1979 to serve wealthy individuals, has lost $38 million over the past eight quarters.
$6 Million Infusion
The company, which has $315 million of assets, said it submitted a capital plan to state and federal banking regulators that includes an infusion of $6 million by Sept. 30 from Putra Masagung, an Indonesian investor who is its principal stockholder.
He previously injected $26 million to bring the company up to regulatory standards.
The bank, which has crumpled under the weight of California's real estate market, tried to recreate itself as a small-business bank two years ago, centering its activities in Sacramento.
On Wednesday, Bank of San Francisco said it will sell the regional office's $40 million of assets and deposits to American River Bank, a community bank.
The sale will result in a loss of "a few hundred thousand dollars" but will help raise Bank of San Francisco's regulatory capital ratios, said Rodney D. Freed, its president and chief operating officer.
The Sacramento strategy was hatched by Thayer Prentice, a seasoned community banker who was brought in as chief executive of the bank in 1991. He will be replaced by Kent Price, who -- subject to regulatory approval -- will be chairman and chief executive officer of the holding company and the bank.
A former chief financial officer of Bank of New England, Mr. Price ran Bank of America's international private banking division until he was demoted in March.
Mr. Freed, the president and chief operating officer, said the company will refocus on private banking and business banking in San Francisco and the Pacific Rim.
The company's stock fell 18.75 cents a share to $1.06 on the American Stock Exchange Wednesday afternoon.