Baseball Team Owners Call Third Strike on Bank

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The owners of the Minnesota Twins baseball team, who hold a large stake in First California Financial Group Inc., have called on the bank holding company’s board to consider selling the Westlake Village institution.

Brothers James, Robert and William Pohlad said in a recent Securities and Exchange Commission filing that company leaders have not done enough to boost First California’s stagnant share price and questioned the long-term strategic plan of the bank holding company.

“(First California’s) current strategy is inadequate to maximize stockholder value,” said the Pohlads, who collectively own a 12 percent stake in the company. They demanded that the board “immediately engage independent, nationally recognized investment bankers with relevant industry and transactional experience to assess all strategic alternatives.”

Among the alternatives, the brothers suggested changes to management; a stock buyback program; or “an extraordinary corporate transaction, such as a merger, reorganization or liquidation.”

C.G. Kum, chief executive and director, did not respond to the Business Journal’s requests for comment, but the company, which is the parent of First California Bank, released a statement saying it would evaluate the Pohlads’ request “in due course.”

“The views of (our) stockholders are very important and (we) will carefully consider their input,” the statement said.

Officers and directors of First California together own about 7 percent of outstanding stock.

News of the Pohlad filing sent shares up as much as 15 percent to $4.17. Shares closed Jan. 18 at $3.97, placing it among the week’s top gainers on the LABJ Stock Index (see page 36).

Taken aback

Some observers were surprised at the Pohlads’ demand, considering the relative strength of the 33-year-old bank, which has $1.8 billion in assets and 19 full-service branches across Southern California.

Richard Levenson, president of Western Financial Corp., an investment banking firm in San Diego that works with community banks, noted that First California has remained profitable for several years and has grown through acquisitions of failed banks. First California has acquired three since 2009, including last year’s pickup of San Luis Trust Bank in San Luis Obispo.

What’s more, the stock, despite a decline from prerecession highs, has been trading at roughly tangible book value, so shares seem appropriately priced.

“In light of the failed banks that they’ve acquired, they seem to be in pretty good shape,” Levenson said. “Clearly the bank has grown. Clearly the bank has been able to demonstrate its profitability. I suspect that the frustration comes down to the fact that the stock price has been down. It probably hasn’t performed as that family had hoped it would.”

The brothers are the sons of Carl Pohlad, the billionaire owner of the Twins for 25 years prior to his 2009 death. The team has remained under the ownership of the Pohlad family, with James Pohlad handling day-to-day operations as chief executive.

Carl Pohlad originally built his fortune in the banking industry. He held stakes in a number of Midwest institutions and founded Marquette Bank, which was sold to Wells Fargo & Co. in 2002.

The family also has ties to Los Angeles. William Pohlad started River Road Entertainment, the Century City production company behind films such as “The Tree of Life” and “Brokeback Mountain,” and co-founded film distributor Apparition.

With more than 3 million shares, the family collectively represents First California’s largest shareholder.

Levenson said that while their stake doesn’t have the standing to force a sale, a demand such as this will likely be taken seriously by the board.

“They probably have enough shares to make some noise,” he said. “That is going to be listened to, and it would get the ball rolling.”

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