Mission Valley Bank Will Get Capital Infusion : Finance: A new investor will make at least $1.6 million available to the troubled institution, acquiring an interest of more than 50%.

SAN CLEMENTE —  The president of Mission Valley Bank said Thursday that a new investor will rejuvenate the financially strapped bank by pumping $1.6 million to $2.4 million of new capital into the institution.

Jack R. Barnes, the bank’s president, identified the investor as Earl L. Gross, but he refused to divulge any other information about Gross.

The new investor is believed to run a mortgage servicing company in Newport Beach.

Under the deal, Gross would acquire a majority stake of just over 50% in the bank with a minimum investment. He could increase his stake to about 80% with a maximum contribution.

Barnes said the bank plans to raise $1 million in a public offering soon. He said the four-member board has committed to buy 20% to 25% of the new stock. Whatever amount is not purchased by the company’s current shareholders or the public would probably be bought by Gross, he said.

The investment by Gross and the proceeds from the stock offering, he said, would give the bank enough cash to satisfy federal requirements for capital, which is a bank’s final reserve against losses.

Regulators have been pressuring Barnes to find new money and to turn control of the bank over to someone else.

Barnes bought 10% of the tiny bank near the end of 1988, but federal regulators refused last year to allow him to increase his stake to 51%.

They were upset over the fast growth of the bank, which had long been the county’s smallest.

Through his aggressive, abrasive style, Barnes awakened the sleepy institution and tripled its assets in one year to $44.1 million. After a profitable 1989, the bank lost $1.2 million last year. The company lost another $211,000 in the first quarter. Barnes has cut back assets to below $38 million.

At the end of March, Mission Valley had the lowest level of capital among Orange County’s 34 independent banks. Its capital of nearly $800,000 then amounted to about 2% of its assets, and figures Barnes supplied Thursday indicated it had not improved much. Regulators require ratios of 6% to 8%.

The bank also had the second-worst loan portfolio among county banks. Nearly 11% of its loans had gone sour by the end of March, and Barnes said the ratio has remained about the same since then. Regulators don’t like to see the ratio above 3%.