Bay View Capital Corp. of San Mateo, Calif., said Monday that the Federal Reserve Bank of San Francisco has denied its request to pay the Sept. 30 dividend on its Capital Securities bonds.
The distribution will be deferred until the $6 billion-asset parent company of Bay View Bank meets certain capital, liquidity, and other requirements, company officials said. Bay View must also seek permission from the Federal Reserve to distribute future dividend payments on its common stock.
This is the latest in a series of setbacks for Bay View. In September it announced the closing of its money-losing Franchise Mortgage Acceptance Co., which had made loans to operators of fast-food restaurants, gas stations, and convenience stores.
Bay View laid off 140 employees after closing Franchise Mortgage and was expected to take a charge of up to $14 million in the third quarter. Also in September the company entered an informal agreement with the Office of the Comptroller of the Currency that requires it to set a new budget and strategic and capital plans to reflect the units closing.
