Top executives at a bank acquired by North Valley Bancorp last year have decided to start their own bank.
North Valley, in Redding, Calif., bought Yolo Community Bank of Woodland, Calif., in April 2004, and then let its former management run it as a separate subsidiary.
Apparently, however, the subsidiary - which in February was renamed NVB Business Bank - was not autonomous enough for the former management.
Over the last several months five former NVB executives have left North Valley. Next week they are expected to submit an application to regulators to form Community Business Bank in West Sacramento, said Mark Day, the former chief financial officer at the $105 million-asset Yolo. Mr. Day resigned last month as North Valley's senior vice president of finance.
"We just want to be able to make our own decisions and grow the bank the way we want to," said Mr. Day, who would be the start-up's CFO. John A. DiMichele, who resigned as Yolo's chief executive officer in February (shortly before it was renamed), is to be CEO.
North Valley officials did not return calls seeking comment on the executives' departures.
Mr. Day said in an interview Tuesday that the group hopes to raise $17 million to $20 million to open Community Business Bank, against the $4.7 million it raised to open Yolo in 1998.
One reason the organizers believe they can raise more this time, he said, is that unlike Yolo, Community Business Bank would not be structured as a subchapter S corporation, so it could have as many shareholders as it wanted. He said he expects the bank to open between October and December with branches in the fast-growing communities of West Sacramento and Lodi. (The group is awaiting approval from regulators.)
It is not unusual for management executives to leave soon after their company is bought, even if they initially planned to stay, said Ramsey Gregg, an analyst at Sandler O'Neill & Partners LP in San Francisco.
"You can only really have one CEO, and CEOs of acquired companies are used to being in charge - they don't want to be second fiddle," Mr. Gregg said.
Though Yolo was already business-focused, North Valley decided to rename it NVB Business Bank because it saw the subsidiary expanding beyond the Sacramento area and found the Yolo name limiting. (Yolo is a Sacramento suburb.)
In April, North Valley announced the opening of two NVB branches in Santa Rosa and Ukiah, Calif., and the hiring of a commercial team of lenders to serve those communities. The lenders left National Bank of the Redwoods after it and its parent, the $515 million-asset Redwood Empire Bancorp in Santa Rosa, was sold to the $5.2 billion-asset Westamerica Bancorp in March.
North Valley announced Wednesday that Edward J. Czajka had resigned as CFO to "pursue other career opportunities." Mr. Czajka joined the company in 2001 and was not part of management at Yolo. Sharon L. Benson, North Valley's senior vice president and controller, is acting as CFO until a successor is named.
