Phillip R. Boyce, one of Califonia's most colorful and controversial bankers, may be getting ready to throw in the towel.
The chairman and chief executive of Pacific Western Bancshares, San Jose, recently hired the investment banking firm Morgan Stanley & Co. to find a buyer for his bank sources said. The sources noted, however, that Mr. Boyce is testing the waters and that the sale of his bank is far from certain.
Few Buyers Seen
Investment bankers say there are few potential buyers for independent California banks, especially ones like Pacific Western with substantial loan-quality problems. They estimate the bank would fetch $80 million to $100 million.
Possible candidates to buy Pacific Western include Detroitbased Comerica Inc., which is expanding in California, and Bank of the West, which is owned by the French bank Banque Nationale de Paris. Both banks declined comment.
Pacific Western's stock was trading Monday afternoon at $3.875, down 12.5 cents. That's just over half the company's book value of $82 million at June 30. It traded as high as $13 in 1989.
Mr. Boyce would not comment on a possible sale of Pacific Western. But he confirmed that he recently hired the New York brokerage firm.
"Morgan Stanley does some work for us." he said in a telephone interview. Asked what kind of work, he responded: "Corporate stuff. It's proprietary."
If the bank is sold, it could end the career of the man who founded Pacific Western in 1975 and built it into one of Northern Califonia's biggest independent banks. The bank has $1.1 billion in assets, 26 branches, and a strong business and consumer operation.
Shrewd, brash, and domineering, the 48-year-old Mr. Boyce has a penchant for raising eyebrows.
Just a little over a decade after starting Pacific Western, he became one of the industry's top-paid executives. His $1.377 million compensation made him the country's ninth-highest-paid banker in 1990, according to an American Banker survey. But his pay plummeted to less than $300,000 when Pacific Western lost money the following year.
Mr. Boyce also drew notice several years ago when he negotiated an unusual agreement with Pacific Western's board giving him a fee potentially worth millions of dollars if the bank were sold for a premium over 2.5 times book value. At the time, Mr. Boyce described the payment as a fee for investment banking services he was performing.
A Public Firing
Meanwhile, disputes with customers, former colleagues, and rival bankers have kept Mr. Boyce in the public eye. For example, a year ago, he publicly fired James R. Kenny, Pacific Western's longtime No. 2 executive. The press release announcing the move said Mr. Kenny had been "terminated."
As the bank's fortunes have sagged in the past 18 months, Mr. Boyce has come under siege. Pacific Western lost $4.6 million in 1991 because of sour real estate loans and a customer fraud.
Those who know him say the steady drumbeat of criticism and the strain of managing Pacific Western in a downtum have taken a toll. "He's pretty tired of running the bank," says one acquaintance.
This is not the first time Mr. Boyce has explored a sale of Pacific Western. But past attempts to sell took place when Pacific Western was riding high. Now he is considering a deal in a tough buyer's market.
In 1990, he nearly sold the bank to Security Pacific Corp. for roughly 2.3 times book value, according to sources. The deal broke down when Security Pacific's stock fell, reducing the effective price to Pacific Western.
Analysts say Pacific Western would not fetch a price remotely near that today, with problem loans and foreclosed property totaling about 5.9% of assets.