A New Jersey investment partnership is seeking to increase its sizable stake in a Southern California thrift in a bid to force the company to consider a sale.
Basswood Partners LP has asked for approval from the Federal Reserve Bank of San Francisco to increase its stake in Anaheim-based SC Bancorp to more than 10%. Basswood currently owns 9.8% of the $470 million-asset holding company for Southern California Bank.
In its filing with the regulator, the partnership also indicated that it may nominate two Basswood principals and another shareholder to the nine- member SC Bancorp board to turn up the heat on management. But general partner Bennett Lindenbaum stressed that the firm has made no decision to take such action or to set a target for the additional stake it might accumulate.
"We're not going to war or anything like that," Mr. Lindenbaum said. "We're simply looking for more direct representation on the board, to hear the views of the shareholders."
SC Bancorp president and chief executive Larry Hartwig declined to comment on Basswood's filing or on whether bank officials have communicated with the firm. But he cited the bank's record third-quarter earnings and stock price as evidence of SC Bancorp's improving performance. And he questioned whether pushing for a sale now would yield proper value for shareholders.
"We think the company is doing well," he said. "It's recovered well, coming into its own, and the third quarter is only indicative of what the future potential is."
The filing by Basswood is the second step in its push for the thrift to be sold. In an October letter to SC Bancorp management, Basswood criticized its financial performance and said a sale would at least compensate shareholders for poor returns.
The firm had said it could see no way to boost earnings sufficiently and cautioned against a costly acquisition that would dilute shareholder value.
"We have a difference of opinion," Mr. Lindenbaum said. "I don't think the board here has really made up their mind what they want to do. So we're weighing in and trying to make our views known."
Mr. Lindenbaum reiterated that waging a proxy battle would be unusual for the partnership, which is normally a passive investor in bank stocks.
"This is not what we do generally, but in some situations it becomes necessary, and we won't shrink from it," he said. "I would hope it would not end up that way, but we want to be prepared to be more active if we have to be."