First National Corp. Renews Bid for Bank of San Diego’s Assets

First National Corp. on Friday renewed its bid to acquire the Bank of San Diego’s assets from BSD Bancorp with an offer to double its previous unspecified cash offer for the troubled bank. First National described its previous offer only as a “premium” over the bank’s book value of $6.7 million.

The renewed acquisition offer expires on Aug. 12, one day after the Aug. 11 annual meeting of BSD Bancorp, Bank of San Diego’s parent company. That timing leads industry observers to believe that First National is trying to force BSD’s board to consider the offer during the annual meeting.

BSD would not comment on the renewed offer, saying its board will review it during a board meeting before the annual meeting. Chief Operating Officer Vito Guarino Jr. said he was “surprised that a second, unsolicited offer was made.” Shareholders will be able to air their opinions on First National’s bid during the annual meeting, according to a BSD spokesman.

BSD turned down First National’s earlier offer which was made June 12, according to First National Chairman Robert D. Richley.

“A lot of BSD shareholders might be wondering why the (BSD) board didn’t take the initial offer,” said one industry observer who is familiar with both banks. “For a troubled bank like Bank of San Diego anything over book value might look like a big plus. I’d say this (offer) is a ploy to get (the bid) out of the board’s hands.”

The acquisition “makes excellent sense for both institutions,” Richley said. “First National will add significantly to its strength and operation breadth, (while) BSD Bancorp will receive a prompt infusion of cash needed to strengthen its other operations.”

First National hopes to gain “some additional earning assets, some (business) in areas of the city where it has no presence, and a trust department, which it doesn’t have now,” said one banking industry analyst.

“There are efficiencies that would be realized, some overlaps where (the combined operations) could be more efficient so earnings would be improved,” the analyst said.

Bank of San Diego last month reported $141,000 in net income for the second quarter, contrasted with $8,000 during the same quarter of 1986. The bank reported a $47,000 net loss for the first half, contrasted with a $21,000 net loss during the first half of 1986. Its stock closed unchanged Friday at $4.25 in American Stock Exchange trading.

First National in May merged its First National Bank subsidiary with National Bankshares of La Jolla and National Bank of Fairbanks Ranch to form a bank with $360 million in assets.