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Escondido’s Community Bancorp, Rancho Santa Fe’s First Community to Tie Knot Sept. 27

Before Escondido’s Community Bancorp agreed to be acquired by Rancho Santa Fe’s First Community Bancorp, it was in talks with another institution in mid-2005. But discussions went nowhere, according to a prospectus issued on the pending acquisition.

Both banks will hold special shareholders meetings Sept. 27, with Community shareholders being asked to approve the sale of the company , almost a certainty given the offer.

The prospectus doesn’t reveal the name of the potential suitor for Community Bancorp, but Western Alliance Bancorp, the Nevada banking firm that owns Carmel Valley-based Torrey Pines Bank, may have been the one.

Gary Cady, CEO of Torrey Pines, wouldn’t confirm whether his parent was involved.

“We’ve probably talked to a lot of different banks throughout the West in the past few years,” Cady said. “I’m not going to comment about (Community Bancorp) specifically or not.”

Cady noted the premiums that some community banks are receiving , as high as three times book value , is driving discussions among many banks, both on the buy and sell side.

The proxy on the Community deal states that Community Chief Executive Officer Mike Perdue received a proposal for a full stock deal from the unnamed lender.

Discussions between the buyer and seller ended in early February , which, coincidentally, is when discussions between Community Bancorp and First Community Bancorp began.

Representatives met in March and April. By May 15, Community’s board voted unanimously to OK the sale. A definitive agreement was signed the same day.

Community agreed to sell at an exchange ratio of 0.735 of First Community stock for each of its shares.

Based on the May 15 share price of First Community stock, the ratio would yield $44.39 per share, or $277 million.

The sale, which received regulatory approval in July, should be completed in the fourth quarter.

First Community, parent to First National Bank, plans to combine First National into subsidiary Pacific Western National. It will then change the name of the combined bank to Pacific Western Bank, to be based in downtown San Diego.

Pacific Western will have $5.5 billion in assets and 70 branches. Perdue is slated be the bank’s president and current First National CEO Robert Borgman would become a board member.

Pacific Western’s chairman and CEO would be Matt Wagner, who is the current CEO and president of First Community Bancorp.

Other banks mentioned as possible suitors to Community Bancorp were Wachovia Bank, based in Charlotte, N.C., which has been on an acquisition tear in the past year and is buying Oakland-based Golden West Financial Corp.; and Washington Mutual Bank, based in Seattle, which recently completed its acquisition of Irvine-based Commercial Capital Bancorp.

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Buyer Bank May Amend Bylaws: First Community is holding a special shareholders meeting Sept. 27 as well to amend its bylaws to expand its board of directors to possibly 15 members, with the exact number to be determined by the board.

The current board consists of 11 directors. First Community’s shareholders do not have to approve the purchase, but do need to approve the bylaws amendment.

One reason for expanding the board is to accommodate two Community Bancorp directors, Chairman Gary Deems and Director Mark Baker, who are joining First Community’s board. The directors will receive an annual stipend of $50,000.

Three Community Bancorp execs have signed employment agreements with First Community Bancorp. They are Perdue, who will be the new president of the combined bank; Gary Youmans, the executive vice president and manager of the Small Business Administration group; and Richard Sanborn, tabbed as executive vice president and chief banking officer.

According to the prospectus, Perdue will be paid $310,000 in salary, plus 30,000 in restricted stock. Youmans will receive $150,000 and 5,000 in stock, while Sanborn will get $190,000 and 7,500 in stock awards.

Perdue is getting near his annual salary of 2005 that was reported in the company’s proxy as $272,000. He also earned a bonus last year of nearly $170,000.

That’s well below the level of Wagner’s 2005 compensation, reported in his firm’s proxy as $450,000 in salary plus a bonus of $675,000.

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HSBC Offers Green Points On New Loans: HSBC Auto Finance, a unit of HSBC North America Holdings Inc. and based in Kearny Mesa, announced an awards program with S & H; Solutions, a unit of Sperry & Hutchinson Co., based in Florida.

The auto finance firm is offering 15,000 S & H; green points on new and refinanced auto loans.

S & H;, which made its name for green stamps, now uses electronic points that can be collected at department stores, supermarkets and other retail outlets, and redeemed for merchandise or used for discounts.

HSBC Auto Finance, headed by John Haines, has 2,000 employees, including 1,100 locally. As of June 30, the unit’s portfolio was $12.4 billion.

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Private Bank Opens: San Diego Private Bank raised $12.4 million in capital to open last month, according to a report from the state’s Department of Financial Institutions. Robert Armstrong, former regional manager for U.S. Bancorp’s San Diego offices, heads the bank.

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Small Change: Corona’s Vineyard National Bancorp, with an office in San Diego, made the list of Fortune Magazine’s fastest growing companies for the second straight year CSI Financial Services in San Diego said it signed another hospital for financing patient accounts. The agreement is valued at $2.5 million.

Send any news about local banking and financing to Mike Allen via e-mail at mallen@sdbj.com. He can be reached at (858) 277-6359.

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