Laguna Niguel’s Monarch Bank Tells How It Hopes to Regain Profitability : BANKING / FINANCE
In an effort to end its money-losing days and regain profitability, Monarch Bank in Laguna Niguel has added four new directors to its board, elected a permanent chairman and built up its construction lending business.
Bad loans in the early 1980s caused the 8-year-old bank to lose about $4 million in the last four years. But E. Lynn Caswell, Monarch’s president, said the bank should be in the black by the end of the second quarter or early in the third quarter.
In addition, the bank’s parent company, Monarch Bancorp, has raised about $1 million in a public offering, which began Feb. 22 and will close June 1. Caswell said he expects the offering to bring in up to $2 million in new capital for the bank.
With a $60,000 loss in the first quarter, the bank’s capital stood at $3.1 million, excluding funds from the public offering. Regulators are requiring the bank, which has $60.5 million in assets, to increase its capital to slightly more than $4.2 million, Caswell said.
Caswell, who has helped to revive banks in San Diego and Bakersfield, was named permanent chairman of the bank and its holding company. The chairman’s position had rotated annually among directors.
Elected to newly created board positions are Henry E. Schielein, vice president and general manager of the Ritz-Carlton at Laguna Niguel; Don A. Beckenbaugh, president and general manager of Laguna Niguel Realty; Rice E. Brown, owner of Rice Brown Financial Services, and Michael E. Parker, owner of Parker North American and Parker Automotive in Newport Beach. The new members bring the total number of board seats to 12.
“When I came in August, I wanted to get active business support,” Caswell said. “This (addition of new directors) is more a matter of charging up the bank and getting it going again.”
He also said the bank has started making construction loans on single-family homes and small commercial projects. The effort to reach into the business community, he said, is helping the bank reach the break-even point without curtailing more traditional retail services.
