Eldorado Bank Beefs Up With Buyout of Mariners : Acquisition: The deal, worth $12.2 million, strengthens the Tustin institution’s position as the county’s second-largest bank.
Eldorado Bank, beefing up its presence in a fast-shrinking industry being dominated by ever-larger institutions, said Tuesday that it has agreed to acquire Mariners Bank in a deal worth $12.2 million in cash and stock.
The acquisition not only secures Eldorado’s position as Orange County’s second-largest bank, but it adds some depth to help it compete against larger banks that also are gobbling up smaller institutions.
The combined operation will give the Tustin bank $387 million in loans and other assets, based on March 31 figures, and 11 branches in Orange, Riverside and San Bernardino counties.
No decisions have been made yet about possible layoffs, but Eldorado executives said they plan to close the bank’s two San Clemente offices and transfer the accounts and employees to the Mariners main office there. It will keep open the Mariners branches in Dana Point and San Juan Capistrano.
J.B. Crowell, Eldorado’s chairman, said that the merger will enable his bank to expand its custom home construction lending, which has been an important part of Mariners’ success, and to become the biggest independent bank in the growing South County. He called the operations of the two banks “especially compatible.”
Richard Korsgaard, Mariners’ president, said the merger will result in greater services for his bank’s customers “while maintaining the personal service that only an independent bank can offer.” Korsgaard had worked at Eldorado before helping to open Mariners in 1982.
Both banks have reputations for strong management and profitability.
Though it only has $79 million in assets, Mariners has been one of the county’s more successful financial institutions.
“It’s a solid bank that has not had an annual loss in the last five years, which is very unusual,” said Edward J. Carpenter, who heads an industry consulting and asset management company in Irvine. “It’s very well run, and it appears to be a nice fit for Eldorado.”
Eldorado has been a longtime survivor of the local banking industry. Crowell, who took over the reins shortly after the bank opened in 1972, has become the dean of Orange County banking, as well as the largest single shareholder of Eldorado’s parent company, Eldorado Bancorp.
His bank has not only produced executives who have become presidents at other banks, but it also has a management team that has been strengthened by other former bank presidents.
Eldorado Bancorp said it will acquire Mariners and its parent company, Mariners Bancorp, by exchanging one share of Eldorado stock for every share of Mariners Bancorp stock and paying $7.30 a share in cash.
The transaction, which is subject to shareholder and regulatory approval, is expected to be completed by the end of the year. The combined size of the bank would still leave it well behind Southern California Bank in Anaheim, which recently acquired much of the assets of Independence One Bank of California in Mission Viejo and now has assets of about $485 million.
Stock in Eldorado Bancorp closed unchanged Tuesday at $12 a share on the New York Stock Exchange.
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Bank Merger
Eldorado Bancorp is purchasing Mariners Bancorp in San Clemente for $12.2 million, raising its profile in South County. The deal will be complete at the end of the year, pending shareholder and regulatory approval. Details on the two companies and the merger:
Eldorado Bancorp * Business: Parent company of Eldorado Bank * Headquarters: Tustin * Branches: 10 * Chairman/CEO: J.B. Crowell * Employees: 120 * Assets: $308 million * First-quarter profit: $882,000
Mariners Bancorp * Business: Parent company of Mariners Bank * Headquarters: San Clemente * Branches: 3 * President/CEO: Richard Korsgaard * Employees: 60 * Assets: $79 million * First-quarter profit: $158,000
Position Strengthened
By acquiring Mariners, Eldorado solidifies its position as the county’s second-largest bank, as measured by assets. Assets and net income, in millions:
Eldorado Bancorp
Assets
1994: $304.2
Net income
1994: $3.0
Mariners Bancorp
Assets
1994: $81.8
Net income
1994: $0.21
Source: Eldorado Bancorp, Findley Reports; Researched by JANICE L. JONES / Los Angeles Times
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