With time running out for the area’s second largest savings and loan, drastic steps are being taken to raise capital.

Shareholders of FirstFed Financial Corp., the parent of First Federal Bank of California, recently approved a plan to increase the number of authorized shares from 100 million to 5 billion in anticipation of a new offering.

First, however, the beleaguered thrift hopes to increase the attractiveness of its penny stock with a reverse stock split, a common but not necessarily effective strategy.

“Generally, these are not the sorts of things that bode well. I don’t want to use the word ‘desperation,’ but it’s got a little bit of that flavor,” said Lynn Stout, a professor of corporate and securities law at UCLA.

Management said the split will be by a ratio of as much as one to 70, meaning shares of FirstFed now trading around 40 cents would be worth about $28 each.

FirstFed did not say when it expects to complete the reverse split or the offering, but analysts expect movement soon since regulators are pressuring the thrift to raise capital. With losses rising in a portfolio full of risky mortgage loans, the thrift was ordered to raise capital by Sept. 30.

Neither FirstFed nor California National Bank, an L.A. institution also ordered to raise capital by Sept. 30, has so far announced a new infusion of cash. Cal National Chief Executive Greg Mitchell did not return calls requesting comment.

However, James Barth, a senior fellow at the Milken Institute in Santa Monica, said regulators typically give institutions some leeway if they believe progress is being made toward raising capital. Since FirstFed has a plan in place and the market itself is turning around, regulators may wait before taking drastic action such as seizing the institutions.

“It’s been quite difficult for any institutions trying to raise capital, (but) things are looking somewhat better for banks,” he said.

FirstFed Chief Executive Babette Heimbuch, reached by phone at her office last week, declined to discuss the matter on the advice of counsel.

Capital Plan

Nara Bancorp Inc., the Koreatown holding company of Nara Bank, is another bank seeking to raise capital. However, unlike FirstFed or Cal National, it is considered well capitalized.

In a shelf registration with the Securities and Exchange Commission, Nara said it hopes to raise up to $150 million by issuing new securities, including common stock, preferred stock or warrants.

A shelf registration allows a company to prepare to issue securities in the near future. Nara plans to use the proceeds for investments, extending loans and possibly making acquisitions.

The filing comes after a similar move by Wilshire Bancorp Inc., the parent of Wilshire State Bank. The institution, also headquartered in Koreatown, has filed to raise up to $100 million in new capital.

IT Buy

Platinum Equity, the Beverly Hills private equity firm run by billionaire investor Tom Gores, has announced another in a series of recent acquisitions.

The firm agreed to purchase Pomeroy IT Solutions Inc., an information technology company headquartered in Hebron, Ky., for $6.50 per share. The terms put the total purchase price at more than $60 million.

The deal is expected to close in the fourth quarter.

Platinum outbid a team that had reached a deal to buy Pomeroy, forcing the IT company to cancel its previously announced merger agreement.

Platinum has announced more than a half-dozen acquisitions in the past year after the close of a $2.75 billion fund, including the high-profile purchase of the San Diego Union-Tribune newspaper in March. The firm suffered a setback recently after its offer to acquire bankrupt auto parts supplier Troy, Mich.-based Delphi Corp. was rejected in favor of a bid from Delphi’s creditors.

C-Suite News

California United Bank, a community bank in Encino, announced that Karen Schoenbaum has been appointed executive vice president and chief financial officer. The current chief financial officer, Robert Dennen, has been named to the newly created posts of chief accounting officer and treasurer. … Nara Bancorp Inc. has announced that it has renewed the contract of Chief Executive Min Kim for the next three years. … Unico American Corp., an insurance holding company in Woodland Hills, announced that Jon Kocourek has resigned from the board. … Colony Financial Inc., a newly formed real estate investment trust in Century City, has appointed John Somers and John Steffens independent directors.

Staff reporter Richard Clough can be reached at rclough@labusinessjournal.com or at (323) 549-5225, ext. 251.

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