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BANKING: Lender seeks federal bailout money
By North County Times | ∞
TEMECULA ---- Another local bank is applying for a sliver of the $700 billion that Congress and President Bush authorized in early October.
Mission Oaks National Bank applied in November for funds from the Troubled Asset Relief Program, and it said Friday in a press release that its shareholders had approved preferred shares that could be issued to the U.S. Treasury Department in exchange for funds.
In contrast to common shares, preferred shares typically pay guaranteed and fixed dividends, and shareholders stand a greater chance of recouping a portion of their investments in the event of a bankruptcy.
The shares to be issued by Mission Oaks Bancorp, the bank's parent company, would carry no voting rights, chief executive Gary Votapka said Friday.
Mission Oaks could be eligible for as much as $5.7 million in federal funds, Votapka said. That would represent an increase of about 20 percent in its cushion of shareholder equity and required reserves, he said.
Shares of the Temecula-based bank tacked on a nickel to close at $3.50 Friday. The bank has two branches in Temecula and one each in Fallbrook, Lake Elsinore and Ontario.
Executives at Temecula Valley Bancorp, a larger bank holding company with headquarters in Temecula, have also indicated that they're applying for money through the federal program.
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