BANKING / FINANCE
Laguna Bank Finally Gets Cash and New Partner Group From Chicago
Nearly two years after announcing it had found a new source of capital, Laguna Bank finally got the cash and a new partner from out of state.
A group of Chicago investors bought a 27% stake in the Laguna Beach-based bank for $600,000 and will pump in an additional $500,000 as part of a secondary offering expected to be made later this month. Current directors and shareholders also will add $500,000 in the secondary offering to maintain their present percentage stake in the bank.
The investor group--consisting of Chicago-based First Oak Brook Bancshares and 20 individuals--also placed two of its members on Laguna Bank’s board. They are First Oak Brook’s chairman, Eugene P. Heytow, and its general counsel, William Navolio.
The bank also named as directors Bernard Smith of Irvine, a Ford Motor Co. executive, and Steven Rabago of Laguna Beach, president of National Corporate Finance Inc. At the same time, Dr. Michael Farrell of Laguna Beach resigned to pursue other interests. The changes increased the size of the board from six to nine members.
Rabago two years ago led a minority shareholder group that questioned the intentions of First Oak Brook. The group was concerned that Laguna Bank would sell out to the Chicago institution without first getting a fair and independent appraisal.
But First Oak Brook never discussed the outright purchase of Laguna Bank and could not do it before a 1991 target date for allowing interstate banking, said George Rawson, Laguna Bank’s president. For now, he said, the Chicago group is acting only as an investor.
Rawson said approval of the investment took so long to obtain because of changing circumstances in the investment group and regulatory demands for information.
Laguna Bank, which has $20 million in assets and has struggled financially for several years, now has more capital than federal regulators require. Once the money from the second offering is collected, Rawson said, it will have twice the required capital, which is a bank’s final reserve against losses.
