O.C. Banking Group Drops Acquisition Plan

After being unable to attract investors on Wall Street, Pacific Community Banking Group has called off a planned stock offering and canceled plans to buy two Riverside County banks.

Pacific Community, based in Laguna Hills, had been trying for several months to raise about $80 million in an initial public offering. But rising interest rates and a hostile market for bank stocks prevented it from attracting investors.

Banks “are not as sexy a story in today’s IPO market,” said Norman Katz, managing partner of MCS Associates, an Irvine-based bank consulting firm.

Pacific Community hoped to use the money to acquire Bank of Hemet and Valley Bank, a deal that would provide the platform for a new bank holding company with 11 branches and about $340 million in assets.

But after several delays in raising the money, the two banks exercised their right to pull out of the deal, according to E. Lynn Caswell, chairman of Pacific Community.

Caswell said Pacific Community is evaluating its options and may start looking for a new acquisition target.

“This was going to be the flagship of the new organization, so obviously we need to do a reassessment,” Caswell said. “But this was never an organization that was only going to do one deal.”