A San Francisco venture firm that invests in underperforming community banks and thrifts has agreed to buy a $55 million-asset bank and become majority owner of a start-up.

Belvedere Capital Partners Inc., which created the California Community Financial Institutions Fund with $75 million of capital in February 1997, has also more than doubled the size of the fund with a cast of blue-chip investors.

Richard Decker, Belvedere's president, said that by yearend the $160 million fund would have bought three or four California community banks with assets totaling about $200 million.

"We're talking to a number of CEOs who would like to grow their banks," said Mr. Decker, former executive vice president of First Interstate Bank and former CEO of Westamerica Bank. His partner is Anthony M. Frank, former CEO of First Nationwide Bank and onetime U.S. postmaster general.

Belvedere Capital said July 10 that it had agreed to buy privately held Downey (Calif.) Bancorp, which has $55 million of assets, for an undisclosed sum.

It also said it would buy up to 65% of National Business Bank, a Torrance, Calif., start-up. Both deals are expected to close this year. They would be the fund's second and third investments; the first was purchase of a 52% stake in $50 million-asset Security First Bank, Anaheim.

The three banks are to operate as subsidiaries of California Financial Bancorp, a holding company affiliate of Belvedere Capital based in Southern California.

The fund aims to supply capital to banks with less than $1 billion of assets-mainly in California-by buying 10% to 100% ownership stakes in seven to 10 community banks in the next four years.

Some of the fund's blue-chip investors are California Public Employees' Retirement System, Bell Atlantic Master Trust, and the Hearst Corp. Master Trust.

Mr. Decker and Mr. Frank said they would also draw on their personal banking experience to guide bank CEOs and boards, when necessary.

They plan to explore the possibility of taking California Financial public in 12 to 24 months, after some size and efficiencies are achieved.

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