Community West Bancshares of Goleta, Calif., has agreed to sell one of its subsidiaries, Palomar Community Bank in Escondido, Calif., to an investor group for about $11 million.
The investors include $70 million-asset Palomar's senior managers. The buyers are to acquire all outstanding stock of the bank in exchange for debt and cash in a deal expected to close by Nov. 30.
Community West, which has assets of $415 million and is headquartered on California's Central Coast, bought Palomar in 1998 to gain a presence in booming Southern California. Lynda Radke, Community West's chief financial officer, said it is selling Palomar to get cash for further development of its primary subsidiary, $338 million-asset Goleta National Bank.
Late last year regulators ordered Goleta to recapitalize because of an $8 million writeoff in connection two loan securitizations. Ms. Radke said that situation has been resolved and that it had no bearing on the decision to sell Palomar.