Last-Minute Infusion of Capital May Have Saved National City Bank

An eleventh-hour infusion of more than $3 million in capital may have saved financially ailing Balboa National Bank in National City from being shut down by federal regulators Friday evening, the bank president said.

Regulators from Federal Deposit Insurance Corp. and the federal comptroller of the currency were inside the bank Friday night as its officers sought to present them with an acceptable solution to net-worth problems that have plagued the bank since 1984.

In an interview Friday night, bank President Robert K. Castetter said the bank’s seven directors each contributed to the more than $3-million cash infusion. The capital brought the bank’s capital-to-assets ratio to more than 8%, Castetter said, well above federally proscribed minimum levels.

Additional capital, possibly through outside investors, will soon be added, Castetter said.

“They were there. There was that possibility,” Castetter said when asked if regulators showed up at the bank Friday with the intention of closing it down. “I give credit to the dedication of our board members.”

Reached by telephone, an FDIC spokesman inside the bank on Friday afternoon said regulators “would not talk about the bank.” Balboa reported a $3.5-million net loss for 1986, dragging shareholder equity as of Dec. 31 down to a negative $454,000. Balboa’s assets are now about $40 million, loans about $30 million and deposits about $39 million, Castetter said.

Balboa directors include Castetter, Jon P. Chester, Arthur Engle, Harry C. Fraser, Dr. Anthony Pierangelo, Dennis L. Russell and John R. Stockholm. Castetter declined to detail how much money each director contributed to the capital infusion.