A First PacTrust Investor Jumps into C-Suite to Scout Deals
Originally published in American Banker, Matthew Monks
August 22, 2012, 04:47 PM EDT
Fast-growing First PacTrust Bancorp (BANC) has taken the unusual step of appointing a second chief executive in conjunction with its third bank deal in two years.
Steven Sugarman, the financier who led a recapitalization of the Irvine, Calif., bank two years ago, has been named co-CEO in charge of corporate affairs and non-depository operations the $1.6 billion-asset First PacTrust's bank holding company.
He will oversee capital-markets matters and the scouting of wealth management and other nonbank acquisition targets, the company told investors Wednesday.
Gregory Mitchell, First PacTrust's CEO since November 2010, will continue as co-CEO of the holding company and remain president and CEO of PacTrust Bank. His primary focus will be on running the loan-and-deposit side of the business and integrating the company's recent bank acquisitions.
"It is unique," Mitchell said in a conference call with analysts. "One of the things that has happened as a result of PacTrust's rapid rate of growth a[bar] is a need for additional resources," he said. The changes were among a series of executive appointments the company announced along with a $50 million agreement to buy the Private Bank of California, a profitable, three-branch retail and wealth management bank with a clean balance sheet that operates in the Beverly Hills section of Los Angeles. Other changes include a new general counsel, a new chief risk officer and the establishment of a new corporate advisory board. The moves are First PacTrust's signal to Wall Street and regulators that it has the bench strength to evolve from a small, sleepy savings bank into a super-community banking conglomerate.
After Private Bank's scheduled close in the second quarter, First PacTrust would have 22 branches in Los Angeles and San Diego and another 23 lending offices in California, Arizona, Oregon and Washington.
First PacTrust had assets of $835 million and ten branches in San Diego and Riverside California before closing two acquisitions this summer. First PacTrust paid $37 million in July for Beach Business Bank in Manhattan Beach and $15.5 million for Gateway Bancorp in Cerritos this month.
Co-CEOs are rare, though not unheard of in banking. Husband and wife Marion and Herbert Sandler built and co-ran Golden West Financial of San Francisco for decades before selling the savings and loan juggernaut in 2006 to Wachovia.
Sugarman appears to be getting more involved as First PacTrust expands into new territories and businesses, says Brett Rabatin, an analyst with the Sterne Agee Group.
Mitchell's background makes it unlikely that board members or regulators made the move because they had doubts about his ability to steer a bigger ship, Rabatin says. Mitchell previously ran California National Bank, which under his stewardship grew from a five-branch wholesale bank with assets of $600 million into a $7. …