First California Financial Group Inc. postponed a common stock offering Wednesday, because of a sharp drop in its share price.
The $1.5 billion-asset company, of Westlake Village, announced plans Dec. 8 to sell at least 7.5 million shares, increasing its share count by roughly 39%. It intended to use the proceeds to grow, organically and possibly by making acquisitions.
But First California's stock fell 31% over the past week. On the news Wednesday, it gained 5%, to close at $2.70.
Several banking companies have called off offensive stock sales recently, citing the choppy market conditions. The $460 million-asset Emclaire Financial Corp. in Emlenton, Pa., did so last week, and the $1.5 billion-asset Alliance Financial Corp. in Syracuse did so in November.
First California, which received $25 million through the Treasury Department's Troubled Asset Relief Program a year ago, has healthy capital ratios. It also added six branches and $270 million of deposits in January when it acquired the failed 1st Centennial Bank from the Federal Deposit Insurance Corp.
But after taking a $4.1 million loan-loss provision to cover higher chargeoffs, the company swung to a $136,000 net loss in the third quarter, from a $1.76 million profit a year earlier. It was the third consecutive quarterly loss.
Because of the economy and a resulting drop in business, First California said it cut 10% of its work force in the quarter and took a $235,000 charge to do so. It expects this to trim $2.2 million of expenses annually.
It also closed a branch, which it expects to save $175,000 annually.