RSS Feed
Stock Sale Gives Bank Long-Awaited Chance to Grow
Finance: Ex-Chairman’s Shares Cannot Be Exercised, According to FDIC Order
BY MIKE ALLEN
First International Bank, a struggling Chula Vista-based bank that is one of the county’s smallest, may have found its white knight.
Last week, the bank signed a definite agreement to sell about 3 million shares of its stock to First California Southern Bancorp, a subsidiary bank controlled by Capital Bancorp Ltd. of Michigan.
The stock sale for $2 million would give First California a 37 percent stake in First International, but effectively it would become the majority owner.
That’s because the shares owned by FIB’s former chairman, Roque De La Fuente, which equal about 25 percent, cannot be exercised. In 2000, the Federal Deposit Insurance Corp. handed down a regulatory order barring De La Fuente from voting on any bank issue, or having any say in the bank’s operations. The order follows a 1997 cease-and-desist order from the FDIC removing De La Fuente from the bank’s board and prohibiting him from having any say in the bank’s policies.
“What we’ve done (by the stock sale) is diluted Mr. De La Fuente’s ownership in the bank. When this is approved by regulators, 51 percent of the ownership will pass to the acquirer,” said FIB President Tom King.
King said he expects regulatory approval within 90 days, at which time the bank would have the additional capital to grow.
Capital Bancorp, based in Lansing, Mich., is a holding company for 29 Banks in eight states including California, where it has a majority ownership in Sunrise Bank of San Diego. The $2.4 billion public firm earned $17 million last year , up 55 percent from 2002.
De La Fuente, the owner of a local car dealership and real estate development firm, said he intended to block the proposed stock sale.
“This is a fraud perpetrated by Mr. King and against all the shareholders,” De La Fuente said.
De La Fuente filed suit in U.S. District Court in San Diego Feb. 27 to obtain a temporary restraining order against the FDIC to permit him to sell his FIB shares to another party. De La Fuente said the competing offer was $2 a share , well above the 66 cents per share deal arranged by King.
Said King: “De La Fuente has no competing offer. He negotiated a deal with another party that has been withdrawn, and he is in complete violation of an FDIC order.”
In addition to the latest suit, FIB was sued in Superior Court by three FIB shareholders, all of whom are colleagues or relatives of De La Fuente. They are David Wick, Roque De La Fuente III, and Katayoun De La Fuente-Yazdani.
De La Fuente first obtained partial ownership of FIB in 1987 when he purchased about $2 million in stock of the bank, then called Peoples Bank. The bank ran into trouble with regulators in the early 1990s with an increase in the volume of problem loans, prompting the FDIC to issue a cease-and-desist order in 1992.
King said De La Fuente’s actions have prevented FIB from raising the necessary capital to meet the requirements of an earlier FDIC order.
“We’re in compliance with all the aspects of that order except obtaining the needed capital,” King said.
Capstone Portfolio Tops $1B; Firm Looks to Expand
San Diego-based Capstone Advisors, a joint venture and equity partner for developers, announced that its residential portfolio now exceeds $1 billion in construction value.
Capstone invests in residential, retail, office, and industrial properties in California, Arizona, and Nevada, along with Florida and the mid-Atlantic states. It also buys into land entitlement and development projects.
“Our goal for the future includes expanding our residential investments to the Eastern U.S., similar to what we have done with the commercial division. At the same time, we are committed to being an extremely responsive real estate investment partner here in the Western U.S.,” said Alex Zikakis, president of Capstone Advisors.
Posted in 
