Banc of California, Irvine, CA (BANC)

A Case of Sticking it to the "Sugar" Man

What more can I say about Steven Sugarman's slippery hands in the Banc of California cookie jar than PL Capital already has in recent 13D filings? Isn't it high time these Scoundrels stop sweetening their salaries and start "Cleaning Up" like Sugarman's apparent doppelgänger and hero Barry Minkow's purporting to do?

Disclosure: As of this posting, I own shares of BANC and may subsequently either dispose of them or purchase more.

Prospective Buyers
City National Corp, Los Angeles, CA (CYN)
PacWest Bancorp, Los Angeles, CA (PACW)
Zions Bancorp, Salt Lake City, UT (ZION)
Financial Snapshot
(as of 03/31/2014)

Total assets:
$4B
Tangible book value per share:
$9.94
NPAs to assets:
0.81%
Price to book:
89.3%
Market cap:
$291.8M
Dividend yield:
4.4%
Trailing 12-month return on assets:
0.0%
Trailing 12-month return on equity:
-0.03%
TARP:
$0M*
*Redeemed $19.3M 12/15/2010
Scoundrels
Steven A Sugarman, Chairman, President and CEO
Chad T Brownstein, Vice Chairman
Ronald J Nicolas, Executive VP and CFO
Red Flags
These Scoundrels have crushed tangible book value at BANC like a stale cookie from $18.47 in 2009 to today's crummy $9.94

Decline in TBV per Share at Banc of California

BANC officers are compensating themselves like kids on a sugar high at a rate running almost seven times the national average and performance of banks like Royal Financial, for the "service" of producing over $2M in losses

Bank Board of Director Compensation vs Reported Profits 2013 RYFL, BANC, national average
BANC ringleader Steven Sugarman bears too many uncanny resemblances to Barry Minkow for my comfort, including behavior sharply inconsistent with the books they author

Books on Corporate Fraud by Authors Steven Sugarman and Barry Minkow


Sources

California Bank of Commerce, Lafayette, CA (CABC)

The Case of an All Star Team in a Hot Market

How's this for a steamy bank stock pick? California Bank of Commerce may have opened its doors at the most inopportune of times in the Fall of 2007 at the onset of the Great Recession, but under the skilled leadership of founding CEO John E Rossell III it didn't even get singed. CABC's book value has grown 48% since 2010. Another four-year surge like this and it will reach $15.45. If CABC sells for twice book like the inferior Virginia Heritage (VGBK) just did, the stock could fetch a toasty $31. Tssss!

Disclosure: As of this posting, I own shares of CABC and may subsequently either dispose of them or purchase more.

Prospective Buyers
Personally, I'd prefer to see this all star team keep stoking it up on their own, but were I one of these area banks, I'd sure be coveting CABC's deposits.
Bank of Marin, Novato, CA (BMRC)
Opus Bank, Irvine, CA (OPB)
Westamerica, San Rafael, CA (WABC)
Financial Snapshot
(as of 03/31/2014)

Total assets:
$373M
Tangible book value per share:
$10.44
NPAs to assets:
1.22%
Price to book:
104%
Market cap:
$46M
Dividend yield:
0%
Trailing 12-month return on assets:
.77%
Trailing 12-month return on equity:
9.6%
TARP:
$0M*
*Redeemed $4M 9/15/2011
Luminaries
Stephen A Cortese, Chairman
Terry A Peterson, President and CEO
Virginia M Robbins, Executive VP and COO
Gold Stars
An all-star team! Clearly with folks like these in charge, the California Bank of Commerce has the steam it needs to power and support growth:
  • CEO Terry Peterson founded Charter Bank in Bellevue, WA in 1998, grew it to $322M in assets and sold it nine years later for 3.2x book value
  • Commercial Lender Rick Harbaugh brings long-standing business relationships from his 15 years experience as a mid-market lender at San Francisco's City National Bank and US Bank 
  • Business Development Manager Colleen Atkinson managed a $250M deposit portfolio at Comerica Bank

$281M in deposits! That's higher than deposits in any other bank branch in Lafayette, CA — more than the...
  • $275M in Wells Fargo's single largest area branch
  • $133M in Westamerica's FOUR local branches, combined
  • $62M in Opus Bank's TWO local branches, combined

In a hot market! California Bank of Commerce is geographically situated in what analysts have argued is America's hottest banking market. In Lafayette's Contra Costa County...
  • Real estate values have rebounded 9% over the past 12 months alone
  • The I-680 Corridor boasts more square feet of office space than the City of San Francisco
  • Available deposits exceed $34B, not counting the $168B in neighboring San Francisco County

Enviable loan growth! Contrast the trendlines of Loans Outstanding at California Bank of Commerce and Westamerica — one of our nation's best-managed and most pristine banks:

Volume of Loans Outstanding
Loans Outstanding at Westamerica (WABC)Loans Outstanding at California Bank of Commerce (CABC)
*Adjusted for $1.2B acquired in County Bank FDIC Acquisition

    Sources