First Community Bancorp, the local parent company of Rancho Santa Fe National Bank, will acquire a five-branch bank in the Los Angeles area under terms of an agreement reached earlier this month. First Community will acquire Professional Bancorp Inc. and its wholly owned subsidiary, First Professional Bank, by purchasing the company's common stock, said Jim Boyce, president and CEO of the Rancho Santa Fe-based bank holding company. First Professional's stock will be bought for approximately $8, or exchanging 0.55 shares of First Community stock for each share of Professional Bancorp, depending on the shareholder's preference, Boyce said.
Professional Bancorp stock has been trading at around $7 on the American Stock Exchange in recent days. First Community's common stock has been trading just below $15 a share.
The total value of the acquisition was put at about $16 million by Boyce. He expected the transaction to close at the end of this year. The agreement must be approved by government regulators. The acquisition, annnounced Aug. 16, runs contrary to the trend of larger, out-of-town banks buying up small local lenders. Major out-of-state banks seeking a share of the San Diego County market have acquired Scripps Bank of La Jolla, El Cajon-based Valle de Oro Bank, Peninsula Bank of San Diego and Downtown's Bank of Commerce in the past two years.
In June, Rancho Santa Fe National Bank merged with First Community Bank of the Desert of Indian Wells. That merger created a bank holding company with $318 million in assets operating in North County and the communities of the Coachella Valley in Riverside County. First Professional Bank has $270 million in assets. It operates bank branches in Santa Monica, Beverly Hills, Pasadena, Tarzana and Redlands.Sign Of The Times
Boyce said although there might be some consolidation in the support staffs of the two banks, public-contact employees such as tellers and loan officers will continue in their positions at First Professional Bank. The bank will retain its name as well, he said. To Peter Q. Davis, former president of Bank of Commerce and now an executive of U.S. Bancorp, the acquisitions by the Rancho Santa Fe company are just a sign of the times. Low stock prices caused in part by the tightening of credit by the Federal Reserve has made many banks attractive takeover targets, he said. "John Eggemeyer, the board chairman of First Community Bancorp, put together a $2 billion banking organization, Western Bancorp, that he sold to U.S. Bancorp last year," Davis said. "I think he might be planning something similar with First Community Bancorp down the road." Boyce said there were no plans currently to sell First Community Bancorp. In fact, the bank is interested in talking with smaller banks in Southern California seeking to be acquired.
"We plan to take advantage of the franchise value each bank has in its market and to maintain the continuity with the customer," Boyce said of the newest acquisition.
First Professional Bank specializes in making business loans to medical professionals for equipment acquisition and other business purposes. It had encountered some problems with its loan portfolio last year, but Boyce said those were only temporary. The acquisition should be of benefit both to First Professional Bank and its depositors and customers, many of whom are doctors, he said. "We can offer them Internet banking with imaged statements and improved data processing service," Boyce said. " We can also offer different types of loans. They currently don't do construction loans or take-out financing."