The long awaited and much anticipated IPO by Novato’s Circle Bank isn’t going to happen. Instead, the community bank founded by Kit Cole and run by daughter Kim Kaselionis, has been sold off to Oregon-based Umpqua Holdings for about $25 million.
The sale of Circle to Umpqua leaves Bank of Marin as the sole community bank in Marin County. Umpqua (as well as WestAmerica Bank) is essentially a regional lender. And Union Bank, which gobbled up Tamalpais Bank when the lender was shut down by the FDIC for making boneheaded real estate loans, is much larger than a regional bank.
The sale to Umpqua breaks down this way: The straight sale price is $20.4 million or $17.75 per share, with $3.5 million going to preferred shareholders as well as the purchase of options—so the sale comes out to $24.9 million. The price is well above what the seven-branch bank hoped to raise in its IPO, which was $10.50 per share. Circle Bank counts $306 million in assets on its ledger.
The sale ends the open question of if or when Circle was going to become a public company and sell stock. The company first filed with the Securities and Exchange Commission in October 2010 to go public, with plans of raising $20 million to $30 million. But the offering ran into some challenges beyond an IPO market that’s been more miss than hit. A fight between some shareholders who wanted to replace the existing management prior to the IPO slowed the bank’s efforts to go public.
At the end of August, Circle quietly filed the paperwork with the SEC to kill the IPO.
In truth, Circle’s IPO timing was in keeping with the institution’s march to a different drummer. The bank had a culture that was unique. It had fresh cookies waiting for customers and, if they brought their dogs, well, rover had treats and fresh water waiting as well.
Since the bank was founded by Cole, an independent businesswoman who was proud she didn’t belong to the old boys’ club, the place had a different feel. There was always a space for kids and Circle tried hard to be a part of the local communities.
Circle had pursued a new headquarters at 999 Grant Avenue, a building that was to become the centerpiece of a community bank with plans to grow strategically in the Bay Area. The approval, demolition and construction of the new building proved to be an undertaking that, like the ill-fated IPO, took some time. The new building will be folded into the Umpqua chain, which includes 85 branches in California (seven locations in Napa and Sonoma) and 199 branches in four states.
Umpqua has big league ambitions. The bank, which has $11.8 billion in assets and $9.4 billion in deposits, at one time talked openly about having a dozen locations in San Francisco. To date, the bank only has one location in the city that’s home to my Giants, and for now it looks like Umpqua has decided on acquisition as its path for growth. Earlier this year, the bank thought it had a deal to buy San Luis Obispo-based American Perspective Bank for $45 million, but PacWest Bancorp money-whipped Umpqua by paying $58.9 million.
Circle has 73 employees and reported $1 million in profits for the quarter that ended June 30, 2012. At this writing, as football season tries to crowd out the Boys of Summer, it remains unclear what, if any, role Cole and Kaselionis will play once the sale closes at the end of the year. The boards of both banks gave the deal their blessing, but the acquisition still must be approved by regulators.
And the winner is…Marin General
We go from the marriage of Circle and Umpqua, which was strictly about money (how refreshing) to the divorce from hell between Sutter Health and Marin General Hospital, because as anybody who’s said “I do” and then found out “I don’t” knows, it ain’t over ’til the judge says so.
In the lawsuit, Marin General accused Sutter of illegally taking $120 million in profits before the facility was turned back to the corporation in June 2010.
In this case, literally, a court-appointed arbitrator ruled in June of this year that the split was official and, at the time, Sutter claimed to be the winner while Marin General did a victory lap. The public relations sleight of hand was enough to give a merry-go-round pony the spins.
But now, Rebecca Westerfield, the grand arbitrator wearing the striped shirt, comes to the rescue. From where she sits, she scores the fight this way: the “prevailing party” is Marin General, which means the Greenbrae hospital gets more than bragging rights. MGH is seeking to be reimbursed for legal fees as well as other expenses. Marin General is already collecting $21.5 million thanks to Westerfield’s ruling that Sutter transferred a little more than $11 million from MGH to a Sutter pension plan—as well short changing the hospital on funding recruitment of doctors and charging the hospital for the use of capital.
Having covered the hospital district for the Pacific Sun newspaper long before Sutter and Marin General squared off in their latest skirmish, I can say that anybody who stood too close to a Marin General fight ended up with stiches.
And having written about this pissing match before (please see “Breaking Up Is Hard to Do,” Only in Marin, Oct. 2010), I find myself qualified to make this pronouncement: While being a journalist means you hear lies on a regular basis, and a certain amount of bull comes with the territory, seldom have I run into corporate communicators so divorced from reality and so devoted to keeping the truth from escaping their slippery grasps into the daylight. While Marin General may have prevailed, and thus Sutter lost, the real loser in this whole journey down the rabbit hole was the public.
Trust me, it’s enough to make you sick.
