Grandpoint Capital's plan to acquire its ninth bank in less than three years has been terminated, or possibly just iced for now.
The $2.1 billion-asset company said late Monday that it and the $378 million-asset NCAL Bancorp (NCAL) had terminated their deal. Both are in Los Angeles.
The deal was announced in early June and was originally valued at $1.45 per share, or $3.4 million. It included a sweetener that would have been paid in 2014 depending on how NCAL's loans performed. The deal was supposed to have closed last quarter.
The companies gave little insight as to why the deal fell apart but hinted that it could be revisited.
"While we are disappointed with this turn of events, we will continue to explore opportunities for a future partnership," the companies said in a joint statement.
The deal collapsed because of "minor" problems on both sides, Henry P. Homsher, the president of NCAL, said in an interview Tuesday.
"They couldn't close it by yearend, and we had credit issues that popped up," Homsher says. "We just felt it was fair for both sides to step back just a little bit and see if we can figure it out."
NCAL had been diligently trying to resolve credit issues, Homsher said. Data from the Federal Deposit Insurance Corp. show that its National Bank of California unit reduced its nonperforming assets from 4.56% of total assets at the end of the first quarter to 3.23% at the end of the third quarter. However, late in the year, two loans — one in the entertainment business and another commercial loan — soured, Homsher says.
"We had done so much to reduce our problems," Homsher says. "We expected better performance."
A call to Grandpoint was not immediately returned.
Grandpoint was formed in 2010 with $75 million of capital to roll up community banks. It has acquired eight banks since then.
NCAL also announced late last month that it would sell its branch in Glendale, Calif., and $12.2 million in deposits to Manufacturers Bank of Los Angeles, a unit of Sumitomo Mitsui Banking. The sale price was undisclosed.
NCAL's shares were trading late Tuesday at $1.85 apiece, down nearly 6%.