Two days after Chicago-based Capitol Bank and Trust said it would plead guilty to bribery charges, its parent, CBC Bancorp, announced it was selling out to Banponce Corp. of Puerto Rico.
The price was not disclosed. CBC has $315 million in assets, $280 million in deposits, and three branches.
CBC Bancorp, parent of Capitol Bank and Trust and Capitol Bank of Westmont, would be merged with Banponce-owned Chicago bank, Pioneer Bank and Trust Co. The transaction would give the Puerto Rico company $760 million in assets in the Windy City.
A plea bargain with the U.S. attorney for Northern Illinois called for CBC to be sold. The privately held bank also agreed to pay an $800,000 fine.
Capitol Bank and Trust said former officers had provided $5 million in bribes to two officials with the Central States Joint Board, a Chicago- based labor organization, in exchange for influence in making large deposits of union money.
The bribes, made in the form of personal loans, were administered between 1986 and 1992, the bank said.
Banponce officials said the current management of Capitol would be offered jobs.
The cash deal, announced last week, is expected to close in the first quarter.
Despite Capitol's problems, Roberto R. Herencia, senior vice president and senior credit officer for Banponce's U.S. operations, said his bank did not get a fire-sale price but would be paying considerably less than the 2.5 to 3 times book value typical for community bank sales.
S. Michael Polanski, president of Banponce's Pioneer Bank, said the price was proportionately lower than for some larger Chicago banks sold in recent years.
CBC's book value is $28 million, Mr. Polanski said. The company earned $1.7 million in the first half, slightly less than a year earlier.
Mr. Herencia said Banponce has been looking for an acquisition in Chicago since it purchased Pioneer two and a half years ago. Chicago is an important market for Banponce, which is beefing up its mainland presence , Mr. Herencia said.
"Chicago is a market we consider strategic in the United States," he said. "It has a large urban population, a large number of Hispanic consumers, and a tremendous amount of small business."
The $16 billion-asset Banponce continues to look for opportunities on the mainland. It has nearly $2 billion in assets in New York and New Jersey and $120 million in Los Angeles. Mr. Herencia said his company also is looking for acquisitions in central Florida and in Texas.
Mr. Polanski said Capitol Bank and Trust fits his company's profile: It's in heavily blue- collar and Hispanic neighborhoods and is primarily a consumer and small-business bank.