Continuing a string of deals, Belvedere Capital Partners has agreed to buy Sacramento Commercial Bank for about $42 million in cash.
The San Francisco venture firm has also filed preliminary plans with regulators to combine four of its banks and said it intends to raise more money to buy others.
Belvedere said it would pay $32.51 in cash, or 2.6 times book value, for each outstanding share of Sacramento Commercial. The transaction would boost Belvedere's holdings around Sacramento to $865 million of assets and complement its August purchase of Placer Sierra Bank in Auburn. Sacramento Commercial has $215 million of assets.
Belvedere Capital was started in 1997 by Richard W. Decker, former executive vice president of First Interstate Bank of Los Angeles, and Anthony M. Frank, former chief executive officer of First Nationwide Bank in San Francisco. It buys ownership stakes in California community banks it believes are undervalued. Armed with $160 million from blue-chip investors such as the California Public Employees' Retirement System and Hearst Corp. Master Trust, the firm has bought four banks and acquired majority stakes in three others, mainly in the Los Angeles and Sacramento markets.
The firm says its next steps are to form a multibank holding company - to be called California Community Bancshares - and to merge the four banks into two. The moves are expected to improve efficiency, increase lending limits, and realign senior management at these banks, according to documents filed with the Securities and Exchange Commission in September.
The reorganization calls for Security First Bank of Fullerton, Calif., to be folded into Bank of Orange County and for National Business Bank of Torrance, Calif., to be merged into CalWest Bank, formerly Downey National Bank.
The mergers are expected to be completed by early next year.
J. Thomas Byrom, chief financial officer of Belvedere, said the firm is in a required quiet period and could not comment directly on the filing. He did say that Belvedere would continue to seek acquisitions in markets where it operates. The firm's prospects have improved since banks have become familiar with Belvedere's strategy and acquisition track record, he said.
"The phone has been ringing off the hook," said Mr. Byrom. "We're definitely in the hunt."
When the Sacramento Commercial deal closes early next year, Mr. Byrom said, Belvedere would have about $20 million left in its acquisition fund. He said the firm expects to get an infusion of roughly $500 million from its investors by next fall.