New York Firm Signs Letter of Intent to Buy Bank of Yorba Linda
A New York real estate and financial services company has signed a letter of intent to buy the Bank of Yorba Linda for $3.5 million to $4 million.
J.M. DeSimone Associates Inc. plans to move its headquarters to Orange County if it can complete the deal, said Joseph M. DeSimone, owner and president of the company based in Smithtown, N.Y.
DeSimone has an exclusive right until July 24 to enter a formal, binding agreement with the bank.
“I’ve been negotiating with him for four months, and there’s probably no question the deal will go through,” said John C. Coehlo, the bank’s chairman and largest shareholder, with about 17.5% of the stock.
Coehlo, who wants to devote more time to developing shopping centers and tending to his 220 racehorses, said he expects the deal to close at the end of the year.
“We are looking for national exposure,” DeSimone said. “Our intent is to eventually move the corporation to California, where we feel our long-term growth is going to be.”
With 16 offices on Long Island, DeSimone runs the largest independent residential real estate operation on the island. And while he said he is now experiencing “the best of times” in New York, he is not sure how much longer business will remain booming there.
“We could have sustained growth for a longer period in California,” he said.
The Bank of Yorba Linda lost a total of $753,000 in 1985 and 1986, but it posted a $424,000 net income for the first quarter this year and expects to be profitable for all of 1987, said C. Ellis Porter, the bank’s president and chief executive officer.
The bank, which opened in March, 1980, grew steadily through 1985 when its assets hit $41.6 million. But its loan losses also grew, and last year, the bank’s assets fell 16% to $34.9 million. Its total loans and deposits last year fell off 25% and 18%, respectively.
Coehlo, president of the Orange-based real estate development firm of Valenti & Coehlo Inc., said the bank has cleaned up its loan portfolio, which was hurt by some business loans that went bad.
He said one reason he is eager to sell the bank to DeSimone is because the New Yorker “fell in love” with the area and wants the bank to continue serving the community. The bank’s lone branch has 6,000 accounts, mostly residents in the area.
Any agreement the bank reaches with DeSimone would be subject to approval of state and federal regulatory agencies and of bank shareholders, who will meet Sept. 8 to vote on a proposal.
Through his umbrella company, DeSimone handles just about everything in the residential real estate field. His operations include new construction, real estate sales, mortgage financing, remodeling and insurance.
Last year, he came close to merging his company into Anchor Savings Bank, a Long Island savings and loan association.
He is viewed in New York as a very aggressive businessman with good market savvy, according to local press reports.
He views Yorba Linda as a “very, very strong local situation” with a “heavy population base, potential for growth and (a company) that could use the management talent we have.”
DeSimone praised the bank’s staff and said he hopes his company can provide “additional staff.”
“We’ll be very aggressive in our banking relationships,” he said.
