Georges Benarroch, a Canadian investor and financial executive, purchased last week 7.1% of the ailing Bank of San Francisco Co.
Also last week, the parent of the Bank of San Francisco said it would suspend the dividend on its convertible preferred stock. In September, the company stopped paying dividends on its common stock.
An Affluent Clientele
Bank of San Francisco, which has $400 million in assets and specializes in banking services for the affluent, ran into problems with its loan portfolio as the economy started spiraling downward.
Problem assets at the end of September equaled 15% of the bank's loan portfolio plus foreclosed property.
In recent months, the bank has scaled back its operations, particularly in home mortgages, and reshuffled top management.
The bank's chief financial officer, William Adams, said the bank is not familiar with or in touch with Mr. Benarroch, who bought 161,000 common shares of the bank's stock, according to a filing with the Securities and Exchange Commission.
Mr. Benarroch, who said he bought the shares for investment purposes, is chairman and chief executive officer of Credit Finance Ltd., an underwriting firm in Toronto.
Up to $3.75 a Share
He acquired the stock through RIF Capital Inc., his Barbados-based investment holding company, the SEC document said.
Mr. Benarroch paid $2.625 to $3.75 a share, compared with Bank of San Francisco's low for this year of $2.375.
The stock's 52-week high was $6.75.