Bank in Valencia Will Be Purchased by Security Pacific

Security Pacific Corp. said Tuesday it agreed to pay $52.5 million in stock to buy Santa Clarita National Bank, giving it a foothold in one of Southern California’s fastest-growing areas.

The Valencia bank is the second small to medium-sized institution in the area to be acquired recently by one of the state’s largest banks. In January, Wells Fargo & Co., the San Francisco-based parent of Wells Fargo Bank, acquired Valley National Bank in Glendale for about $55 million.

Wells Fargo and Security Pacific, which is based in Los Angeles, are aggressively buying smaller banks to expand in areas where their presence is thinnest.

Santa Clarita has five branches in the Santa Clarita Valley and six in the San Fernando Valley. The bank is considered by banking officials to have the largest market share in the Santa Clarita Valley, where Security Pacific has three branches now. Santa Clarita National earned $4.2 million during 1989 and had $258.2 million in assets.

Jim McDevitt, Santa Clarita’s executive vice president, said “there is no talk of layoffs” as a result of the merger. Santa Clarita has 285 employees, about 50 of whom work in its headquarters.

Although it is headquartered in the fast-growing Santa Clarita Valley, the bank has succeeded by concentrating on loans to small and medium-sized business, not home mortgages.

The price Security Pacific is paying comes to 2.3 times Santa Clarita’s fully diluted book value, a measurement calculated by deducting an institution’s liabilities from total assets. While that is considered a healthy price, it is below many of the recent acquisitions of medium-sized banks, which typically have sold for 2.5 times their book value or higher.

The acquisition must be approved by regulators and Santa Clarita shareholders. Security Pacific said it expects to issue as part of the sale from 1.1 million to 1.5 million shares, an amount that will be determined according to Security Pacific’s average stock price prior to the date the sale closes.

Security Pacific is the fifth-largest banking company in the United States, with more than $84 billion in assets. Its main subsidiary, Security Pacific National Bank, is the second-largest bank in California and has 557 branches.

Times staff writer John Medearis also contributed to this story.