PNB Group to Restructure After 2nd Year of Losses

After reporting a second consecutive year of losses, officials from PNB Financial Group, the holding company for Pacific National Bank, announced a restructuring of the boards of directors at both the bank and holding company and said the holding company has begun an outside search for a new president.

The action comes at a time when the Newport Beach-based bank has announced a $1.5 million turnaround, from losses of more than $1.3 million in fiscal 1983, to the 3-year-old bank’s first-ever yearly profit in fiscal 1984, of $21,000. However, PNB Financial, its parent holding company, reported a loss of $73,000 for fiscal 1984, compared with losses of $1.56 million the year before.

Donald L. Solsby is president and chief executive of both the bank and holding company. Named to the post in March, 1983, following the resignation of James B. Lynch, Solsby said the restructuring has been a part of the bank’s master plan for two years. Solsby will remain as president of the bank.

With plans this year to diversify into financial areas outside of banking--and Solsby’s expertise mostly limited to banking--the holding company has decided to seek a leader from outside. But in a telephone interview, Solsby played down the significance of the newly created position, saying it may not be filled until next year.

Although no newcomers were named to the Newport-Beach based company late last week, a number of board members were appointed to new executive committees at both the bank and its holding company. Previously, both operations were overseen by a single 12-person board.

Bank officials say that both actions are aimed at expanding operations at the bank and holding company. Solsby said the holding company has identified four new finance-related areas into which it hopes to expand in 1985. Among these are real estate services and mortgage banking, he said.

The company expects to hold its second public offering later this year to raise between $2 million and $4 million, Solsby said. Both the bank and holding company expect to report “significant” profits for fiscal 1985, as the holding company diversifies into new financial areas, Solsby said.

Stops Short of Praise

But Jerry Findley, editor of the Findley Reports, a Brea-based newsletter on California financial institutions, said, “The bank’s performance to date is not something I would call a raging success.”

While calling the bank’s latest move’s “prudent,” Findley said that “Talk speaks one language, performance speaks another.”

Performance will soon improve, however, the bank’s chairman, Terry Giles, said in a statement. Pacific National’s long-range goal is to be the “dominant” Orange County financial institution serving the area’s middle-market businesses, he said.

Named to the holding company’s new executive committee were holding company Chairman David Stein, and four directors: Robert Campbell, Charles Knickerbocker, James Brakke and U.T. Thompson. Also appointed to the bank’s executive committee were Giles, Solsby, and W. Scott Biddle, the bank’s vice chairman.

In addition to the new executive committees the company will also add an advisory committee to more closely involve outside directors in the bank’s activities.

The bank, which opened in 1982, and its holding company, which opened in 1983, employ a total of 35 workers. The bank’s assets for the year ended Dec. 31, 1984, were $52 million.