Magazine article American Banker

Ventura County National Rebuilding Capital

Magazine article American Banker

Ventura County National Rebuilding Capital

Article excerpt

Ventura County National Bancorp sold $1.55 million in common stock and promissory notes late last month to boost the capital of the two-bank holding company.

The stock and debt sale is part of a two-pronged strategy to put the Oxnard, Calif.-based company on better financial footing as it works through its real estate loan problems in the Los Angeles area.

Richard S. Cupp, president of Ventura, said the company will boost the capital of its subsidiary banks in the coming months, as well.

The money was raised by the sale of $1.43 million in new common stock and a $125,000 sale of unsecured notes bearing 7% interest.

The securities. sold mostly to directors and institutional investors, retired a loan that funded the company's employee stock ownership plan.

Southern California Trend

A host of community banks in Southern California raised capital in 1993, spurred by massive reserving for problem real estate assets as the region's economy continued to slump.

"We may have been a little later than most to realize our problems," said Mr. Cupp, who replaced William E. McAleer five months ago to deal with the bank's deteriorating asset quality.

"We've had to take high reserves in recent quarters -- $6 million in the third quarter alone."

Ventura was founded in 1982 as the holding company for Ventura County National Bank in Oxnard. In 1987 the company turned southward, acquiring La Palma-based Frontier Bank. La Palma is in Orange County, Southern California's hottest area for residential and commercial realty speculation in the late 1980s. …

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