South County Bank Says Offering On Track
By RAJIV VYAS
Rancho Santa Margarita startup South County Bank hopes to raise $4.5 million through a stock and debt offering designed to bankroll more branches.
“We’ve had several communities approach us and ask us to establish branches there,” said Thomas Yott, chief executive of South County Bank. “The intent of the public offering is to start establishing branches throughout Orange County.”
The bank, which counts just one branch now, started soliciting potential investors for its direct offering in mid-March. Yott said he expects to wrap up the offering by early June.
The bank is targeting South County residents, businesses and private investors for its share and debt offering. It hopes to use the money to open four to five new branches, all in South County.
Of the targeted $4.5 million, $1.3 million is subordinated debt with a variable interest rate slated to be 3% more than the three-month London interbank offered rate. Another $3.25 million is being raised through a stock sale.
“We want to meet the philosophy of the bank and keep it local,” Yott said. “We want to keep the ownership of the bank right where the service market is.”
So far, “response (for the equity offering) has been very high,” he said.
South County Bank started operations in late 1999 with a branch and headquarters in Rancho Santa Margarita. Since then, the bank has focused on running that branch and making it profitable, according to Yott.
In 2001, the bank’s second full year of operations, it turned a profit for the first time, Yott said. The bank has been making money this year as well, he said.
“The intent of the offering is to take the next step,” Yott said. “Our intent is to open a minimum of one and possibly two branches this year. The goal is to open one new branch each year after that.”
Among the cities eyed for branches: Mission Viejo, Lake Forrest, Aliso Viejo and Laguna Hills.
“I don’t want to rule out other areas,” Yott said. “There are 15 communities and any one of them could be a candidate. We are completing the feasibility study right now.”
A decision on South County’s second branch is due by June, Yott said.
South County Bank focuses on retail and small to midsize customers in South County. It raised around $4 million from 290 shareholders in its startup capital in late 1999.
As of March, South County Bank counted $55 million in assets. By the year’s end, the bank is targeting assets of between $85 million to $100 million.
