Western Liberty says bank buy gains approval
Western Liberty Bancorp said Monday that it received regulatory approval to acquire Service1st Bank of Las Vegas and to boost the bank's capital by $25 million.
The bank holding company expects the $20 million transaction to close late this month.
"This will make us one of the strongest capitalized banks in Nevada," Service1st Chief Executive Bill Martin said in a statement.
Michael Frankel, chairman-designate of Western Liberty Bancorp, said in a statement that the group looks forward "to making a substantial positive contribution to the local Nevada community banking environment."
Frankel succeeded Jason Ader, a former Wall Street analyst with Hayground Cove Asset Management, as chairman of the holding company.
Bank acquisitions, other than those handled by the Federal Deposit Insurance Corp. when an institution fails, have been rare in states like Nevada and Florida, where real estate values and numerous banks have collapsed.
The buyout of Service1st by Western Liberty will be the first such merger in Nevada since the recession began.
Western Liberty, previously known as Global Consumer Acquisition Corp., announced its plans to acquire Service1st in September 2009. It reported a definitive agreement to buy out the bank two months later.
The merger parties struggled to get regulatory approval for the deal, apparently because bank regulators have been reluctant to authorize private equity firms and other Wall Street investment firms to take over commercial banks.
The Review-Journal has learned that SKBHC Holdings of Corona del Mar, Calif., dropped its planned acquisition of First National Bank of Starbuck, Minn.
Goldman Sachs Inc., the giant Wall Street investment bank, earlier reported that it intended to buy a 24.9 percent stake in SKBHC. First National dates back to 1898 but has only $18 million in assets.
Analysts suggest that regulators refused to sign off on the Minnesota bank deal because of worries about the involvement of a Wall Street firm.
Western Liberty has several prominent shareholders. Wells Fargo and Co., the holding company for the similarly named giant bank, holds a 7.6 percent interest in Western Liberty.
Mutual fund giant Fidelity Management and Research Co. is the biggest single shareholder with a 24.4 percent stake. KBW Asset Management, which is affiliated with prominent financial company investment banking firm Keefe Bruyette & Woods, holds 4.3 percent.
The bank will continue operating under the Service1st name with the same top management, including Martin.
Service1st reported $232 million in assets on June 30 and a 16.9 percent risk-based capital ratio. It lost $2.2 million in the second quarter, up from a $1.8 million first quarter loss .
Contact reporter John G. Edwards at
jedwards@reviewjournal.com or 702-383-0420.
