PRESCOTT, Ariz., March 3, 2011 /PRNewswire/ -- Bill Frank, president of Summit Bank of Prescott, Arizona today announced that the Bank's Board of Directors has decided to seek an acquiror for the Bank. This decision is based on the Bank's need for additional capital to satisfy a regulatory requirement and the Board's conclusion that it will not be able to raise the required additional capital from non-control investors. The need for additional capital is largely the result of losses incurred by the Bank due of the weakness in the real estate market in the Prescott area. The weakness in the local real estate market has forced the Bank to create additional reserves for potential loan losses and to write down the value of the real estate properties the Bank has acquired over the last two years through foreclosures. In explaining the Board's decision to seek an acquiror, Mr. Frank said, "Even though the current weakness in the local real estate market is generally expected to be temporary, it is not feasible to postpone action until the expected real estate recovery is in full bloom. We must act now."
Mr. Frank joined the Bank as president in July, 2010, and since that time has made a number on changes designed to improve the operating and financial performance of the Bank. In January 2011, the Bank reported a small profit, showing that these changes are starting to produce the desired results. Summit Bank has been in business since 2002 and has built a stable customer base in the Prescott market that is generally viewed as an attractive banking location due to the area's growing population and its appeal to new residents, particularly retirees. Prescott was listed in the October 2010 issue of Smart Money magazine as one of the most attractive places to retire in the United States. The Bank currently has local deposits of $76 million.
In discussing the Bank's plans for seeking an acquiror, Mr. Frank said, "I believe the Bank would be an attractive acquisition for another bank or a non-bank entity involved in a business that is compatible with banking, such as a mortgage banking firm or an SBA lender. We have a valuable banking infrastructure that would be very costly to recreate and a brand that is well known in the area. Despite our recent problems, the acquisition of Summit will provide the acquiror with a reliable deposit base and a solid foundation upon which to build a profitable bank. Moreover, in the current economic climate both state and federal banking authorities have been reluctant to issue new banking charters; so the acquisition of a bank like Summit is perhaps the only viable way for a non-bank entity to enter the banking business."
Summit Bank has recently retained Bentley Associates, a New York-based investment banking firm, to assist it in finding a suitable acquiror.
SOURCE Bentley Associates, L.P.