Offer seeks up to $30 million, SEC could respond this week
NOVATO — Circle Bancorp, the parent of Circle Bank, may hear as early as this week if the U.S. Securities and Exchange Commission will approve a filing requesting to raise between $20 million and $30 million in capital through an initial stock offering.
Kit Cole, chief executive officer and chairman of the board, said once they get approval, they will be able to price the offering.
“The main reason for going public now is that we can’t think of a better time for a healthy bank to be raising capital,” she said. “Most companies that are raising money are trying to dig themselves out of a hole, and that means investors are buying shares of broken banks. In this case they are getting management that has been able to thrive during the worst period of banking since the depression, a management that has been able to manage risk control.”
“A key element of the bank’s plans for expansion is to strengthen core deposits by focusing on business banking and business lending to clients from whom we can obtain their entire core deposit banking relationship,” the filing document read.
It stated that the bank has strengthened its cash-management services to include remote deposit and online cash management and has targeted marketing and business development efforts to attract these clients.
Noninterest-bearing deposits increased to 11.8 percent of total deposits as of June 30, 2010, from 8.1 percent 12 months before, according to the filing.
“It couldn’t be a more opportune time to raise capital and extend our reach and deepen our services offerings.” Ms. Cole said.
“We have already been building a brand from Santa Rosa to San Francisco, and we are looking to expand into the South Bay and beyond and into the East Bay,” she said.
She said the bank is looking for both organic growth opportunity and the possibility of acquisition. The bank has hired senior management and staff from those areas so when opportunities present themselves for expansion, the bank is equipped with people who know the areas.
“This is a great opportunity for us with so many old community banks being taken over by the FDIC,” Ms. Cole said. “I have never seen such a great opportunity as exists today.”
Headquartered in Novato, Circle Bank has 56 employees with branches in Marin, San Francisco and Sonoma counties. The bank was established in 1990 under the name New West Thrift and Loan Co. It changed its name in 1998 to Novato Community Bank and in 2003 to Circle Bank.
The offering will end either at the bank’s discretion after the minimum offering of $20 million is sold or as of Dec. 15 of this year. If the offering is completed, shares will be issued on the closing date. If the minimum number of shares is not sold, funds will be returned.
According to the filing, the bank’s current commercial lending activities tend to focus on businesses and professionals who are also depositors. As of June 30, the bank’s “legal lending limit” was approximately $6.6 million, which would increase to approximately $11.4 million if all the shares of common stock offered are sold, according to the filing.
Circle Bancorp reported earnings of $295,000 for the quarter ending Sept. 30 and nine-month net income of $1.033 million, up $23,000 compared with the nine-month period in 2009.
Ms. Cole became the chief executive officer and chairman of the board in 2008. She had been a director and chairman emeritus of Circle Bancorp and Circle Bank since December 1998.
Ms. Cole has experience in taking a bank public. In 2001 she founded Epic Bancorp, which later became Tamalpais Bancorp. During her tenure, the bank expanded from one location to seven branches and grew to more than $525 million in total assets. She led the public offering, which was completed in 2004.
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