Wedbush Bank, a savings and loan owned by securities brokerage Wedbush Inc., is selling its loans and deposits to Grandpoint Bank.
Alan Rosen, a partner with Calabasas law firm Horgan Rosen Beckham & Coren representing Grandpoint in the deal, said applications have been filed with bank regulators and that the transaction could close later this month or early next.
Officials of both downtown L.A. institutions declined to comment.
Grandpoint is not buying the bank itself, but about $105 million in loans and about the same amount of deposits from Wedbush. That represents almost all of the bank’s assets and liabilities.
The fact that Grandpoint is not buying Wedbush Bank outright could imply that Grandpoint doesn’t care to acquire Wedbush’s lone bank branch or even its tiny portfolio of past-due loans. Rosen said he could not comment on why the deal was being structured this way.
Another local lender, now-defunct Evergreen International Bank in Long Beach, sold itself in the same way last year. It sold most of its loans and deposits to First Choice Bank in Cerritos, then forfeited its charter, a move Wedbush could also make.
SNL Financial, a Charlottesville, Va., news service covering the banking and finance industry, first reported that a deal between Wedbush and Grandpoint was in the works last month.
The Federal Reserve last week signed off on the union of two big local bank holding companies, PacWest Bancorp of Century City and CapitalSource Inc. of downtown Los Angeles.
That was the last approval the two companies needed for the deal, first announced in July. PacWest will pay about $2.3 billion in cash and stock to CapitalSource investors.
In a statement last week, PacWest said the deal would close this week. CapitalSource Bank will merge into PacWest’s Pacific Western Bank, creating the fourth biggest bank in Los Angeles. Pacific Western will have assets of about $15.4 billion – bigger than Chinatown’s Cathay Bank.
The combination is the latest move to shake up the list of biggest local banks. In February, former savings and loan OneWest Bank changed to a bank charter, overtaking Cathay as the third largest local lender. Cathay now ranks fifth. L.A.’s five largest banks are now City National, East West, OneWest, Pacific West and Cathay.
Speaking of bank sales, another local deal announced last year appears to have stalled. Brentwood lender National Bank of California said in September that it had signed an agreement with an unnamed investor who planned to pump about $24 million in capital into the bank and thus become its majority owner.
The deal was expected to close in the first quarter, but the second quarter is here and there hasn’t been a peep out of the bank or its holding company, NCal Bancorp, since the deal was announced six months ago. Bank executives did not return calls for comment.
The investment was contingent on NCal repaying the money it received from the Treasury through the Troubled Asset Relief Program, or Tarp, and on the bank resolving an inquiry made by the Department of Justice over the its processing of electronic payments for online lenders.
It’s not clear what if any steps the bank has taken to clear up the Justice Department inquiry, but it hadn’t repaid the Treasury as of Feb. 28, when it still owed $10 million, according to the monthly Tarp report.
If the deal with the unnamed investor falls through, it would be the second failed buyout bid for National Bank in as many years. Grandpoint announced plans to buy the bank in summer 2012 but the two banks walked away from the transaction.
Pasadena lender East West Bank is opening a branch in Las Vegas’ Chinatown, the second L.A. bank to do so recently.
Cathay entered the Sin City market in June when it bought a branch from a Houston bank holding company.
The branches are about a mile apart on Spring Mountain Road, the main commercial drag of the city’s Chinatown neighborhood.
Emily Wang, a senior vice president at East West, said that while this is the bank’s first branch in Nevada, East West has been doing business in Vegas for a while.
“We’ve had a good client base there for years,” she said. “We have commercial real estate investors and also hospitality clients. We’re not going there with empty hands.”
Wang also said East West plans to open additional branches in the area.
Staff reporter James Rufus Koren can be reached at email@example.com or (323) 549-5225, ext. 225.
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