A second group of investors is pushing for the sale of Professional Bancorp, Santa Monica, Calif., according to Securities and Exchange Commission documents.
In a joint filing at the agency, Redwood Asset Management and individual investor Jay Spellman called Professional's operating strategy "flawed" and urged management to hire an investment banking firm "to pursue the immediate sale of the company."
The Nov. 3 filing came just three weeks after New York-based Basswood Management Inc. said in SEC documents that the sale of $245 million-asset Professional would be in shareholders' best interests.
Professional is the parent of First Professional Bank, a 16-year-old institution catering mainly to doctors, dentists, and other Los Angeles- area professionals.
In an interview, Mr. Spellman said Professional has an "interesting and potentially profitable niche." But he said the company's expenses and capital base are too high and its return on equity-8.35% in the third quarter-is too low.
"I think the bank should be a division of a larger and more diverse operation," said Mr. Spellman, who together with New York-based Redwood own a 6.65% stake in Professional. (SEC rules require investors controlling more than 5% of a company's stock to disclose their intentions.)
Melinda McIntyre, Professional's chief executive officer, acknowledged that the company is carrying too much capital and said it is considering a stock repurchase and other methods of deploying the excess. She added that Professional would consider a merger if the right partner came along.
Still, Ms. McIntyre could not hide her frustration with the investment groups. She said that the more investors pressure the company to sell, the greater the perception will be that Professional is "damaged goods."
It's "very problematic" when you're trying to find a merger partner, "trying to build a company internally, and trying to attract and retain employees," she said.
Mr. Spellman was unsympathetic. He said that if Professional really wants to build value, it would find a buyer that can offer the bank's customers even more products and services.
