Two California banks have terminated their sale agreements with a would-be holding company that failed to raise the money to buy them.
The deals would have created a $346 million-asset bank company with 11 offices in Riverside and San Bernardino counties.
Bank of Hemet in the city of that name and Valley Bank in Moreno Valley pulled out after Pacific Banking Group of Laguna Hills terminated its $68 million initial public offering.
Pacific Community, created two years ago to buy small banks in Southern California, pulled the plug on the IPO because investors would not pay the $15 per share offering price.
Fears of rate hikes frightened them off, said, Jim Hill, managing director of investment banking at Los Angeles-based Sutro & Co., the underwriter for the offering.
The failed attempt ended an 18-month ordeal for Pacific Community, which had planned to go public in the summer of 1998 but postponed the move when the market for public offerings dried up.
"Everyone put in a lot of effort," said Harold R. Williams, chief financial officer at Bank of Hemet. "We wished it would have happened."
It is unclear whether Pacific Community will remain in business, said Sutro's Mr. Hill. The company owns no banks so far and lost $264,360 in the first half.
E. Lynn Caswell, the company's chairman, did not return telephone calls.
-- Matt Andrejczak