Capital Corporation of the West, parent of County Bank, Merced, Calif., has started its own merger and acquisitions practice.
The community bank holding company launched Capital West Group Inc., a full-service financial institutions advisory firm, earlier this month.
The subsidiary will be a resource for independent financial institutions in 11 western states, and will be involved with merger and acquisition issues, the company said. It will provide advisory work as well as organizational financing for bank start- ups.
Edward E. Schmidt, who will lead the subsidiary, said Capital West would be unable to handle megamerger deals, but should be able to work with a majority of the institutions in the West.
He said he knew of no other bank in the region that features such a subsidiary.
The move, an effort to boost fee generation, should enable Capital Corp to take advantage of California's active market, according to Tom Hawker, Capital Corp's president and chief executive.
"It's certainly a hot market these days - not only from the acquisition side, but from the start-up side also," he said. "We feel pretty comfortable that this will be an opportunity that will be good for everyone concerned."
The formation of Capital West was a natural progression, according to Mr. Hawker. Mr. Schmidt, formerly a co-director with the Findley Group, an Anaheim, Calif., financial industry consulting firm, had assisted in the formation of the Capital Corp holding company and its agreement earlier this year to acquire Town and Country Finance and Thrift.
"We have been working with Ed Schmidt for the past year or so on a number of projects and felt quite comfortable with him," Mr. Hawker said. He added that his own extensive community banking background should also help the new entity.
"I believe that as someone who has worked for a community bank for many years and who has many contacts in the industry, my understanding of the industry will be beneficial," Mr. Hawker said.
Mr. Hawker said Capital West will be able to handle candidates throughout the West, a move that will enable the subsidiary to work with groups interested in moving into California.
Both officials stressed the importance of Capital West's autonomy, which they said is essential if the investment banking firm is to gain the confidence of potential clients.
"The information flow to the board of directors will be very limited," Mr. Schmidt said, adding that only the holding company's chairman and president would be privy to Capital West's inner operations.
