Central Calif. Neighbors Have $52 M Deal
Pacific Capital Bancorp in Salinas, Calif., said it plans to buy San Benito Bank in Hollister, Calif., in a stock deal worth about $52 million. San Benito has $201 million of assets and three branches. Pacific Capital, the parent of First National Bank of California, has $2.8 billion of assets and 37 branches in six counties in central California. San Benito would become a subsidiary of Pacific.Edward T. Stephenson, president and chief executive officer of San Benito, said it is selling because of intensified competition. Banks that want to "continue serving their markets with superior service" need to join others with the same operating philosophy, he said.
The deal was announced late Thursday and is expected to close in the second quarter. Shares of San Benito had fallen 31.75%, to $18, by midafternoon Friday. Pacific's shares were trading at just under $29, unchanged.
- Matt Andrejczak
FDIC Tells 2 Other Calif. Banks to Shape Up
The Federal Deposit Insurance Corp. has slapped two California banks with cease-and-desist orders.In an order handed down in December and disclosed last week, the FDIC said that $94 million-asset First Mountain Bank of Big Bear Lake had engaged in hazardous lending and collection practices and had too little capital for its assets and liabilities.
The FDIC also ordered First Mountain's senior vice president, Richard A. Lawson, to stop working for the bank.
In another order, the FDIC told the board at Bank of Lakewood to tighten internal controls and "increase its participation in the affairs of the bank." The $28.4 million-asset bank, which opened in March 1987, has suffered huge losses - including $906,000 in the first nine months of last year and $208,000 in the year-earlier quarter - and the FDIC said it has a large pool of low-quality loans.
- Matt Andrejczak