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Year starts off with several mergers, acquisitions

Los Angeles-based bank holding company Grandpoint Capital Inc. had a busy start to 2012, completing its merger with Regents Bancshares and entering into definitive agreements to acquire both California Community Bank (OTCBB: CABK) of San Diego and Bank Capital Corp. of Arizona.

As part of the merger of Grandpoint Capital and Regents Bancshares, La Jolla-based Regents Bank is now a wholly owned subsidiary of Grandpoint Capital as of Jan. 27 and will continue to operate under its existing name.

Dan Yates, chief executive officer of Regents Bank, said the shareholders had an interest in selling the stock but also had a desire for the bank to continue. Yates accepted the role as president of Grandpoint Capital and he will continue as CEO of both Regents Bank and California Community Bank.

The terms and value of Grandpoint Capital’s acquisition of Regents Bancshares were not disclosed.

“The shareholders are concentrated among a couple individuals. It was a very fair price for the bank and it sold at a price they are very satisfied with,” Yates said.

Grandpoint Capital purchased California Community Bank, which operates four offices in San Diego County, for about $30 million, plus an amount equal to California Community Bank’s adjusted net income shortly before closing, and less an amount equal to certain other expenses, according to a press release.

“Grandpoint is a company that has been put together by community bankers who believe in the community banking model. Regents is much the same as our model as far as operating strategies,” said Larry Hartwig, CEO of California Community Bank.

Yates said Hartwig’s future role at the bank is still being defined.

Hartwig and Yates both said they expect job cuts to be minimal, if there are any at all.

“You have two geographically separate entities -- there are no overlapping branches. When you put the two companies together, you’re not going to double the size without increasing staff,” Hartwig said.

Benefits of the acquisition to California Community Bank include double the net worth and an increase in the lending limit of the surviving entity, according to Hartwig.

Grandpoint Bank, another Grandpoint Capital subsidiary, has a jumbo mortgage product and 7(a) loans, and it will be able to originate loans for Regents and California Community banks’ clients, Yates said.

Grandpoint Capital expects to complete its acquisition of California Community Bank in the third quarter of 2012. It expects to complete the transaction with Bank Capital Corp., the parent company of The Biltmore Bank of Arizona, in the second quarter of 2012.

Yates said he hopes for more acquisitions in the future.

“It’s a process. We have to first let it be known that we’re interested, then see if it fits the culture and philosophy and if there’s an interest from the stakeholders on the other side,” he said.

Grandpoint Capital’s other subsidiary is Peoria Holdings LLC, and it is also a majority owner of the Bank of Tucson.

As of Jan.31, Grandpoint Capital had total assets of approximately $1.5 billion and in excess of $210 million in shareholders’ equity. As of Dec. 31, California Community Bank had total assets of $243.8 million and Regents Bank had total assets of $345 million, according to a press release. California Community Bank is headquartered in Escondido and operates four branches in Escondido, Encinitas, San Diego and Vista. Regents has offices in San Diego, La Jolla, Carlsbad, El Cajon and Vancouver, Wash.

Additionally, San Diego-based online lender FirstAgain LLC was acquired in January by SunTrust Banks Inc. (NYSE: STI) of Atlanta. SunTrust Banks entered into a definitive agreement to acquire FirstAgain on Jan. 23. Mike McCoy of SunTrust said the terms and value of the transaction will not be disclosed. He expects the management team at FirstAgain to remain. The companies anticipate the transaction to be completed in the second quarter of 2012.

“We expect to benefit from [FirstAgain’s] innovative enhancement. I believe SunTrust will benefit from enhancements to online banking,” McCoy said.

As of Dec. 31, 2011, SunTrust had total assets of $176.9 billion and total deposits of $127.9 billion, according to a press release.

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