New Target for Bank CEO with Stock-Picker's Touch

By Reosti, John | American Banker, May 14, 2002 | Go to article overview

New Target for Bank CEO with Stock-Picker's Touch


Reosti, John, American Banker


James F. Dierberg may run one of the nation's largest privately held banking companies, but he has a knack for picking the stocks of publicly traded banks.

The chairman and chief executive officer of the $6.7 billion-asset First Banks Inc. in St. Louis, who owns stakes in about a dozen other community banks, recently bought a 6.6% stake in the troubled Community West Bancshares of Goleta, Calif., according to an April 19 Securities and Exchange Commission filing.

Why Mr. Dierberg would buy 375,000 shares in a company that is barely profitable and is the target of several lawsuits is unclear (he did not return repeated phone calls requesting comment), but if his investment history is any indication, he may be betting that Community West will soon sell itself.

Since the mid-1990s Mr. Dierberg's family-controlled investment partnership, Investors of America LP, has had a nose for community banks about to be sold, and has reaped handsome profits from its acquisitions.

For example, in March 1997 the group bought 288,875 shares of the Hinsdale, Ill.-based Alliance Bancorp, which Charter One Financial Inc. of Cleveland bought last year for $241 million. Investors of America's profit: $9.9 million.

The partnership purchased 47,000 shares of 1st Bancorp in May 1998, two months before the Vincennes, Ind., company announced its sale to German American Bancorp of Jasper for $57.1 million. That sale generated a $942,000 profit for the partnership.

"He has a fabulous investment track record," said Joseph Stieven, an analyst at Stifel, Nicolaus & Co. in St. Louis.

Mr. Dierberg's purchases are not limited to stocks of banks that he expects will be sold soon -- in fact he has held several in his portfolio for six years or more.

But none of those companies is as battered as Community West. The $372 million-asset parent of Goleta National Bank reported a loss of $3.9 million for the fourth quarter and a profit of just $22,000 for all of last year. (It has yet to report first-quarter results. …

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