State Regulators on Doorstep : San Francisco Firm Buys El Camino Thrift

With its capital base eroded and state regulators ready to take over, El Camino Thrift & Loan Assn. was sold Monday to First Republic Bancorp in San Francisco for “nominal consideration.”

El Camino, a subsidiary of San Diego Bancorp, immediately received a $6.25-million cash infusion, boosting its net worth from a negative $1.2 million to a positive $5 million, according to James Herbert II, president of First Republic.

El Camino has assets of about $35 million, but its liabilities exceeded its assets by about $1.2 million, the result, Herbert said, of a series of loan problems.

“We got caught in the crack at the wrong time (and) the only logical thing to do was to sell it,” said Ray Tobin, chairman and president of San Diego Bancorp. Tobin took the company’s helm in August after buying 200,000 shares of stock for $130,000 from former Chairman Jack Alexander.

One week later, El Camino’s largest debtor, American Trails, went bankrupt, and the $4.8 million it owed El Camino was placed on hold.

“We’re still waiting, but I can’t afford to wait (to collect the money),” Tobin said.

The state Department of Corporations “would have taken action” against El Camino had First Republic not purchased the Escondido-based thrift, both Tobin and Herbert confirmed Monday.

Tobin’s estimates of El Camino’s net worth differed from regulators’ estimates. “The state says we had no assets,” he said in an interview Monday. “But our (accountants) say we had $2.41 million in assets and, at that rate, our net worth would be $1.25 million.”

The discrepancy, according to Tobin and Herbert, is how the state accounts for loans that haven’t yet been collected.

First Republic, a privately owned company with $26 million in assets and $9 million in equity, owns and operates First Republic Thrift & Loan.