Irvine-based Spectrum Bank has been bought by a San Francisco-based private equity firm looking for more deals in Southern California.
Late last month, Belvedere Capital Partners LLC paid $37 million for Spectrum, a lender to small businesses. The deal included $22 million in cash and the rest debt.
Spectrum is set to be combined with Professional Business Bank of Pasadena, which Belvedere bought for $51 million in cash and stock a year ago.
Spectrum Chief Executive Tom Timmons plans to retire and be replaced by Norm Broyer, who heads Professional Business Bank in Pasadena.
The two banks are expected to combine this summer, said Alan Lane, executive chairman of Belvedere’s company for its Southern California acquisitions.
Spectrum got its start as Garfield Bank in Montebello, which was owned by local investors. It moved to Orange County five years ago with plans to expand here.
The 50-year-old bank has $160 million in assets and branches in the Irvine Spectrum, Montebello and Huntington Beach.
Professional Business Bank of Pasadena is set to have assets of about $450 million once it combines with Spectrum.
Spectrum has seen its deposits stay flat in the past year but isn’t troubled with bad loans, according to Lane.
Belvedere plans to buy more banks in Southern California, according to Lane. The goal is to acquire smaller banks, combine them and possibly sell them.
“We’re looking for opportunities to build the premier small business bank,” Lane said.
Belvedere had sought to buy Newport Beach-based First Heritage Bank NA for $47 million in a deal that was called off in December. First National Bank Holding Co., a Scottsdale bank with $4.5 billion in assets, owns First Heritage.
“We determined that it was in the best interests of both parties to end the discussions and focus on our respective businesses,” Lane said.
Belvedere doubled its money with a similar acquire-and-combine strategy in Northern California.
In 2006, it sold its stake in Sacramento-based Placer Sierra Bancshares to Wells Fargo & Co. for $645 million in a deal that included Placer Sierra’s Anaheim-based Bank of Orange County.
Belvedere expects to buy another bank by the end of the year, according to Lane. It’s looking at banks in Orange, Los Angeles and San Diego counties.
“We could have three more in a few years,” he said.
Banks struggling in the credit crunch have made for more attractive deals, Lane said.
“As some tighten lending, they get frustrated,” Lane said. “We’re seeing lots of opportunities for expansion.”
Lane is the former president and chief executive of San Bernardino’s Business Bank of California, which had $700 million in assets before it was bought in 2003 by Union Bank of California.
Belvedere, which started in 1994, owns 18 community banks.
It raises money from institutional investors, pension funds, fund managers, wealthy individuals and its own investment team.
