Group Buys Interest in Grand National
Investors who bought Grand National Bank last July have sold a controlling interest in the small bank to an investor group for $5.4 million.
But bank officials who issued a press release late Tuesday were not available to say what effect the investment would have on the bank’s operations or management. The press release did not provide either the number of new investors or their names.
In prepared remarks, Howard K. Lee, the bank’s chairman, said the directors were pleased with the investment group’s purchase of 510,000 newly issued shares of Grand National stock for $10.68 a share. Lee and his group had paid about $4.7 million for the bank during the summer, and the latest stock offering raises the capital level to $10.1 million.
“The increased capital . . . will enable the bank to continue to improve the services and financial products offered to its customers and to meet the challenges of today’s competitive banking market,” he said.
The transaction pumps fresh cash into an already solidly capitalized banking operation.
With the proceeds, Grand National could easily support more than $150 million in assets. The bank, however, had only $29.7 million in assets at the end of September.
Directors have long been dissatisfied with the bank’s lack of growth and its lackluster financial performance. It earned only $2,000 through the first nine months last year. Annual earnings were not available.
The bank has few troubled loans--only $4,000 worth at the end of September--and it appears to be a healthy bank from the financial information it provides regulators.
The bank’s biggest problem for some time, according to several banking consultants, has been that it caters to people far from its headquarters. Grand National, which is situated in Santa Ana, was formed in 1983 to serve members of the Chinese business community, who are spread throughout Orange County.
“The bank is more of a Westminster bank or Alhambra bank,” said Kenneth Slezak, head of Vista Marketing, a bank consulting firm in Huntington Beach. It did open a branch in Alhambra to cater to the Asian community there, and it serves the Vietnamese community in Westminster.
