'Bank of Mrs. B' shares rising, though owners aren't selling.

A sleepy three-branch bank in East Los Angeles that was founded more than 40 years ago by the U.S. treasurer under Richard Nixon has seen its shares skyrocket 160 percent in the past month.

Market makers believe that Pan American Bank, which caters to Hispanics, is a takeover target--although the family that owns a majority stake says it will never sell.

The institution is controlled by Romana Acosta Banuelos, 79, its chairman and chief executive, and her daughter, Ramona Banuelos, 48, who is chief financial officer and runs day-to-day operations. With more than 80 percent of the bank's 1.5 million shares outstanding, the Banuelos have no explanation for the stock's sharp rise.

"We're clueless," said Ramona Banuelos, whose mother is referred to as "Mrs. B," by bank customers and family. "Speculating on our stock is a hobby for some people who think the company will be bought. We've been approached by banks over the years, but there's no incentive for Mrs. B to sell."

Pan American Bank was purchased by a group of Latino business owners, including Banuelos, in 1963. She was and remains owner and operator of Ramona's Mexican Food Products in Gardena, which sells packaged burritos and tamales to Smart & Final Corp., 7-Eleven stores and local restaurants.

When Nixon went looking for support among Hispanics in California, he appointed Banuelos U.S. Treasurer in 1971. She came under fire while awaiting Senate confirmation when Immigration and Naturalization Service agents conducted a raid of her company and arrested 36 illegal Mexican immigrants who were working there.

Banuelos was confirmed anyway and served three years before resigning in 1973 and returning to Los Angeles to run her businesses.

Lightly traded stock

The stock trades infrequently because shares are held almost exclusively by insiders.

Also, investors have been snapping up stocks of small and medium-sized banks that have outperformed the overall market in the past two years amid a flurry of bank mergers and acquisitions.

Pan American's financial results have fallen since 2001 when it suffered a drop in loans that Banuelos attributed to the Sept. 11 terrorist attacks and the weak economy.

The bank reported 2003 net income of $370,000, up from $281,000 a year earlier. Interest income, the rough equivalent of revenue for financial institutions, was $2.1 million in 2003, up from $1.9 million in 2002, but down slightly from $2.5 million in 2001.

Market makers who trade Pan American on the Pink Sheets electronic quotation system say several investors are vying to purchase shares, which has caused a gap in price.

The stock jumped to $8.60 a share on April 2 after listing at $6 a day earlier. Trading under the ticker symbol PABK, the stock hit $3.30 as recently as March 10. With just 255,000 shares in the float, even a single trade can cause the price to jump.

"This is one of those stocks that is classically illiquid. It just doesn't trade often," said Cromwell Coulson, chairman and chief executive of Pink Sheets LLC, the privately held New York firm that runs the online trading system for micro-cap stocks. "This is a stock that trades by appointment so someone bid the shares up and just waited for a seller to come around."

John Ballantine, a market maker at Paulson Investment Co, in Portland, Ore., said he believes the stock is trading higher because of the recent sale of Quaker City Bancorp in Whittier to Popular Inc., a bank in San Juan, Puerto Rico.

"Generally a rising tide lifts all ships," he said. "They need to sell out and I'm sure they've been approached at different times."

He speculated that because the bank pays an annual dividend of between 10 cents to 15 cents a share, the Banuelos family reaps a healthy annual payout.

The family appears content to stick with the status quo, making small loans to neighborhood business owners. "I would love to grow at this point but my Morn is tired and she doesn't want to grow," said Banuelos. Two bilingual loan officers were recently hired to assist in business development.

"We've always been a very small bank," she said. "Other banks that started up have been sold and we're still here."

Pan American Bank

Stock Prices

April 14, 2003   $2.27
April 14, 2004   $8.60

YEAR (Dec. 31)                      2003      2002

Net Interest Income (millions)      $2.3      $2.2
Total Expenses (millions)            1.7       1.7
Net Income                       370,000   281,000
Earnings Per Share                 $0.25     $0.19
Provision for Loan Losses             $0        $0

Quarterly Net Income (thousands)

[GRAPHIC OMITTED]

SUMMARY

Business: Commercial bank
Headquarters: Los Angeles
CEO: Romana Banuelos
Market Cap: $13 million      Dividend Yield: 1.2%
Total Liabilities: $35.5 million  P/E Ratio: 35.1
Long-Term Debt: $0