Santa Ana Mayor Miguel Pulido has served on the Board of Directors of the Fullerton Community Bank for many years. He told me last year how proud he was of their long record of success. Fullerton Community Bank has made money while other banks have lost money.
Just consider what happened to the Santa Ana Business Bank, which was founded by Alfredo Amezcua, a criminal defense lawyer who ran unsuccessfully against Pulido last year. Amezcua ended up selling the bank at a huge loss to their investors. He sold the bank for six million, and investors only got about six dollars a share. The investors initially put in about ten dollars a share, and it bottomed out at $3.50 a share.
Fullerton Community Bank’s mother company, RMG Capital Corporation, on the other hand, has been sold for $50 million dollars – a substantial profit to Opus Bank. “The boards of directors for Opus and RMG have approved the transaction, which values RMG common stock at $17.47 a share,” according to the O.C. Register.
I reviewed RMG’s stock, and found that it has jumped to a high of $16.65, according to Businessweek, after averaging about $5 for quite awhile. The RMG investors are going to make out quite well in the sale of their bank.
The news gets even better as “Additionally, concurrent with the close of the transaction, the Opus Community Foundation intends to award grants to local non-profit organizations in the communities served by Fullerton Community Bank,” according to an RMG press release.
In related news, the Voice of OC blog once again proved to be anything but objective, with a ridiculous post that fails to mention that Fullerton Community Bank sold at a profit and that their non-profits are going to be supported by their new owner. Once again the Voice of OC has proved to be just another blog with a chip on their shoulders, not a legitimate news site.
Why are you writing about questionable capitalistic profiteering? You should be writing about Mexico taking the U.S. team to the Lavanderia on Sat. It was so sad. Mexico put on a great show though. Most of Santa Ana was delighted.
mateo,
LOL! I just posted that story too.
(from Office of Thrift Supervision )
Total Savings Association Equity Capital 61 million plus
Sales price : 50 million
Lost on sale: Almost 11 million dollars
It is a tuff economy out there, we can only hope that the Santa Ana director does a better job for the city of Santa Ana than the job all of the directors and key employees are responsible for at the Fullerton Community Bank.
Nice try Cook. You have to look at the share value to make the profit determination.
Equity Capital is the accumulated cost of the stock purchased. So the bank as a whole had a loss. There is not enough information on individual stock holders to determine if any of them made a profit.
cook,
Again, I defer to media reports and the releases in question. Here is what it comes down to – the buyer is assuming the capital issue. That is why they are buying the bank. But when you buy a bank the capital is just part of it. You also buy the history, the goodwill, the real estate and other holdings.
The bottom line is that the investors got over $17 a share for stock that was trading at about four bucks. The Santa Ana Business Bank investors got about $6 for stock that was also at about four bucks. But they paid ten bucks per share. Ergo they lost a ton of money. Not so with the Fullerton investors who made money in their transaction.