Tustin’s Sunwest Bank Bolstered by $3.6-Million Capital Infusion

NEWPORT BEACH — The parent company of Sunwest Bank in Tustin said Tuesday that it has put $3.6 million in capital--the final reserve against losses--into the bank to comply with federal mandates and that it expects to remain profitable this year.

Long-struggling West Coast Bancorp used the cash it received from the January sale of its Sacramento First National Bank unit to bolster its remaining subsidiary.

The cash came too late to help the Newport Beach parent company last year. West Coast posted an annual loss of $5.2 million, or 57 cents a share. Even so, that was an improvement over its worst-ever results in 1993 when it lost $12.1 million, or $1.32 a share.

For the fourth quarter, West Coast lost $1.2 million, or 13 cents a share, compared with the previous year’s quarterly loss of $2.9 million, or 34 cents a share.

Though still losing money, company executives are upbeat about West Coast’s recent financial performance.

“We are continuing to work toward more profitability,” said Frank Smith, the company’s chief financial officer. He said that Sunwest has been taken off federal regulators’ list of troubled institutions.

Prompted by growing losses at the company’s banking subsidiaries in 1992, which then also included a thrift and loan, regulators imposed a series of restrictions on Sunwest and its sister companies. At one point last year, it was categorized as “severely undercapitalized” and was ordered to raise additional capital, which is essentially investor funds and earnings retained by the corporation.

Sunwest finally solved its problem this year when it sold its Sacramento subsidiary to Business & Professional Bank in Woodland. The Northern California bank paid $3.6 million in cash and about 243,500 shares of common stock for the Sacramento bank.