Two Pasadena banks to combine
The combination of two Pasadena banks illustrates how opportunistic private investors are taking control of a growing number of recession-battered financial institutions.
Professional Business Bank, a community bank under regulators’ orders to raise capital, is being acquired by California General Bank, which opened in March 2009 with backing from Carpenter Community BancFund.
Headed by Irvine investment banker Edward Carpenter, the private equity fund also owns Bridge Bank in San Jose, Mission Community Bank in San Luis Obispo, Bank of Manhattan in El Segundo and Plaza Bank in Irvine.
Details of the latest deal weren’t disclosed. The transaction, expected to close in the fourth quarter, would create a bank with $365 million in assets and branches in Pasadena, Glendale, Montebello, Huntington Beach and Irvine.
Mary Lynn Lenz, chief executive of Professional Business Bank, would hold that post in the combination of California General and Professional Business. California General Chairman David T. Blankenhorn would be chairman.
The Federal Deposit Insurance Corp. ordered Professional Business to raise capital last August. Had a deal to sell some or all of the bank not materialized, it could have been taken over by regulators and sold off by the FDIC, the fate of 28 California banks and thrifts in the last two years.
Private investors often have waited for a bank to fail before buying it with financial help from the FDIC.
The ability of Professional Business and some other institutions to find buyers before failing suggests a strengthening of the banking industry.
Lenz said her employees were “ecstatic” that they would stay in business without interruption.
“Having capital is a marvelous thing, especially at this time,” she said.
Three banks that failed Friday in South Carolina and Florida were acquired from the FDIC by a 7-month-old private equity group headed by a former Bank of America vice chairman. On July 9, a private equity firm agreed to take over a failed Baltimore bank.
Professional Business itself had been acquired in February 2007 by a private equity group: Belvedere Capital in San Francisco, which provided $12.6 million in fresh capital in May to keep the bank alive while takeover talks continued.
