California's Bay View Capital Corp. has tripled the number of shares it can issue, giving itself more flexibility for making acquisitions or preventing a hostile takeover.
The San Mateo-based thrift and finance company got shareholder approval in late May to increase the number of authorized shares to 60 million from the current 20 million.
The $3 billion-asset company has 13 million shares outstanding after a 2-for-1 stock split June 2. Another 775,000 shares are reserved for stock option plans.
The decision to authorize more shares came on the heels of Bay View's May 8 announcement that it planned to buy $2.2 billion-asset EurekaBank, the Foster City thrift subsidiary of America First Financial Fund, Omaha. Bay View is paying $300 million, mostly in stock, for the thrift and will issue eight million to 10 million shares. The deal is expected to close by January.
Although the proxy statement was dated April 18, before the merger announcement, Bay View was already in merger negotiations at that point and knew it would need the stock authorization, said president and chief executive officer Edward H. Sondker.
Also, according to the proxy statement, the company could use the additional shares for other acquisitions, as well as for public or private stock offerings, stock splits, or dividends. No further transaction is currently planned, according to the proxy.
During the past two years, Bay View has been diversifying its thrift away from mortgage lending.
It acquired a small thrift and loan last year, which it has converted into a consumer finance company, and it bought a commercial finance company in early 1997.
"We are obviously very interested, both in the consumer side and the commercial finance side, in expanding," Mr. Sondker said. "With the Eureka acquisition, we're not looking at any other bank acquisitions until we get that digested."
"They are very acquisitive," said Caren E. Mayer, vice president at Montgomery Securities in San Francisco. She agreed that the company's focus is likely to be on the consumer and commercial finance operations but added, "I wouldn't rule out further deposits acquisitions" to fund loan growth.