Failed Bid for Bank Branches Does Succeed in Impressing
Veteran banker Robert P. Keller raised a few eyebrows with his company’s bid for 61 bank branches that Wells Fargo had to sell to complete its purchase of First Interstate Bank.
It wasn’t so much that Keller, a banker in New Hampshire and Arizona who moved to Newport Beach last summer, was trying to put together a string of community banks statewide. Many major players have talked about that.
What caught the attention of the banking community was that he and his investment bankers were able to raise $647 million in only six days. That he lost the bid for the branches to Home Savings of America almost seems beside the point.
“It’s the most money I’ve seen raised for a bank purchase in a one-week period,” said Edward J. Carpenter, an Irvine banking consultant and one of the advisors who helped raise the money. Even Keller said he was surprised at the amount raised so quickly by the three investment bankers he hired.
Keller, who has gained a reputation nationally for building financial institutions and selling them at high premiums, had sought $400 million in private placements for the deal. The team of advisors, led by Friedman Billings Ramsey & Co., raised $647 million from about 50 individual and institutional investors, such as T. Rowe Price and Fidelity Investments.
The strong response was attributed to “a combination of an attractive transaction to obtain a large banking franchise in California” and an experienced management team led by a banker well known to the investors, Carpenter said. Keller has earned returns of more than 50% on each of three previous bank sales, he said.
Keller heads a group of investors that bought Liberty National Bank in Huntington Beach last week and, previously, San Deguito National Bank in Encinitas. The organization, Dartmouth Capital Group, based outside Manchester, N.H., also has a deal pending to acquire a Sacramento bank. The three banks hold a total of more than $400 million in loans and other assets.
The purchase of the 61 First Interstate branches “would have been a giant step in the right direction” toward a statewide community banking operation with $2 billion or so in loans and other assets, Keller said.
“We will forge ahead, continuing to look at other possible acquisitions,” he said. “We want to be a commercial bank that helps small and medium business as well as the consumer.”
The unstated plan, said industry sources, is to build a network of banks and sell the entire operation, probably to a major out-of-state bank.
James S. Granelli covers financial institutions and fraud issues for The Times. He can be reached at (714) 966-5810 and at james.granelli@latimes.com.
