California Oaks State Bank hopes for $100M
Editor’s note: An earlier version of this article gave an incorrect figure for California Oaks’ captial raise.
California Oaks State Bank, a community business bank based in Thousand Oaks, plans to raise as much as $100 million as part of a new strategy to snap up the assets of failed banks.
California Oaks, which also has a Simi Valley branch, said Feb. 17 that it will offer 8 million shares at $12.50 each. While some of the money could be used to buy back stock and pay back money borrowed from the government during the financial meltdown of late 2008, one of the big reasons for raising the capital is to take advantage of unprecedented deals on the loans of banks that have gone under, said Chief Executive Officer John Nerland.
In such deals, the Federal Deposit Insurance Corp. provides protections for a potential buyer of a failed bank’s assets, often shielding buyers from radioactive loans by agreeing to take on the bulk of any losses.