Bank Hopes to Grow With Stock Sale : Finance: First National of Ventura plans a public offering so that it can accept more deposits and make more loans.

Some of the nation’s biggest banks may be merging, but that isn’t stopping some of the smallest ones from trying to survive on their own. Case in point: First National Bank of Ventura.

First National, a one-office bank founded in 1988 that caters mostly to small- and medium-sized businesses in Ventura County, is a small fish in a big pond, with assets of only $34.8 million as of June 30.

But it hopes to expand with the help of $1 million that it hopes to raise with a planned secondary offering of stock to the public. The offering consists of 121,212 units priced at $8.25 each, with each unit composed of one share of the bank’s common stock and one warrant to purchase an additional common share at $8.25.

Plans call for officers and directors of the bank to buy about 62,000 of the units, or a controlling 51% of the offering. (Currently, the bank has 340,745 shares of common stock outstanding, 40% of which are owned by directors and executive officers.) But getting the public interested in the new securities might not be as easy if the stock’s past performance is any indication.

The bank’s existing stock has been thinly traded on the over-the-counter market, and it has dropped to between $7 and $8 a share lately from its $11 to $12 level in the first quarter of 1989, according to the offering’s prospectus.

First National’s profitability, however, has turned up. After losing $748,017 in 1988 and $474,358 in 1989, the bank posted a $111,303 profit last year and had a $61,035 profit in the six months that ended June 30. The losses were mainly caused by start-up costs and by a portfolio of car loans that included a rash of defaults.

First National said it would use most of the cash raised through the pending offering to boost its regulatory capital so that it can accept more deposits and make more loans. As of June 30 the bank had $32.5 million in deposits and $22.7 million in loans outstanding.

Even if the offering succeeds, First National will still be a tiny player in the market, even by Ventura County standards.

Two other banks--Bank of A. Levy and Ventura County National Bank--have dominated the local banking industry for years. (Their parent companies have combined assets of more than $1 billion). And California’s biggest banks--Bank of America, Wells Fargo, Security Pacific and First Interstate--all have branches in the area.

By virtue of their size, those banks have access to international money markets, their lending limits are substantially higher and they can buy expensive advertising.

Bank of A. Levy, for example, recently launched an aggressive ad campaign to attract former customers of Santa Barbara Savings & Loan, which was purchased by Bank of America in August. The ads urge customers to keep their money circulating in the local economy. “Don’t Give Your Money to Strangers,” one ad reads.

First National, too, hopes to capitalize on local loyalties.

The bank targets such businesses as retailers, manufacturers, suppliers and professionals. Commercial loans make up the bank’s largest lending category, accounting for 73% of loans as of March 31. Real estate loans, a prime source of woe for the banking industry overall, made up only 4% of First National’s loans in the first quarter.

And, unlike most banks in the region, First National said its reserve against possible loan losses has generally been decreasing because of an improving loan portfolio.

First National Bank of Ventura at a Glance First National Bank of Ventura is a one-office bank that was founded in early 1988. The bank focuses on serving small-and medium-sized businesses in Ventura County. First National hopes to raise $1 million with a pending public stock offering.