Error Scuttles Southwest Bancorp Stock Swap

VISTA —  There must be times when Southwest Bancorp officials figure they can’t win for losing.

Take last week, when, in the span of four days, the Vista-based holding company for Southwest Bank happily reported record earnings of $604,000 for the six months ended June 30 and proudly announced that it had received final approval to be listed on the American Stock Exchange.

But it also sheepishly revealed that it was going to rescind last year’s preferred stock-swap offering because of a technical error in an offering document.

The faux pas--the filing of an incorrect form with regulators--was described by officials as an “inadvertent error.”

But it added another sour chapter in an already controversial stock swap that lured only about one-third of Southwest’s preferred shareholders.

The company, trying to delay $1 million in unpaid preferred dividends, in December offered to give stockholders seven shares of Southwest common in exchange for each of the 200,000 preferred shares outstanding.

But shareholders were skeptical, and only one-third of the 303 preferred investors tendered their shares. Only 91,290 preferred shares were exchanged for 639,030 common shares.

Because of the error, those who tendered will be offered a chance to get their preferred shares back.

Meanwhile, Southwest has received final approval from the American Stock Exchange to list its 3,740,463 shares of outstanding common stock with the exchange, beginning today.

Southwest’s stock has been traded in the Over-the-Counter market.

It is the first time that a bank holding company in California has been listed with AMEX.

“We are so pleased with our earnings and with the AMEX announcement that nothing can take away from it,” spokeswoman Pamela DeLozier said.