Acquisition Completed by National Bank

Santa Ana’s National Bank of Southern California completed its acquisition of financially troubled Pacific Regency Bank on Wednesday, giving National Bank a prime location on the edge of the Irvine Spectrum business corridor.

Pacific Regency’s sole bank branch will open for business today as National Bank, said William Jacoby, National Bank’s chairman.

National Bank acquired Pacific Regency by assuming its liabilities. No cash or other payments traded hands, Jacoby said, leaving shareholders essentially with nothing for their $3.5-million investment in the 4-year-old bank.

Jacoby said the dozen employees still working at Pacific Regency will remain in their positions. The status of the bank’s president, Dennis Frank, however, was uncertain Wednesday night. Jacoby said he and Frank still are negotiating on a possible position for Frank.

Bank’s Second Branch

The 5-year-old National Bank, one of the county’s consistently healthier institutions, plans to use the Lake Forest Drive branch to target the growing number of companies moving into the industrial center known as the Irvine Spectrum. The El Toro branch will be National Bank’s second.

Both banks had targeted small companies and professional firms as a primary source of business. Pacific Regency’s office is an ideal location to serve the small businesses in the Irvine Spectrum, Jacoby said.

But while National Bank has been successful, building its assets to $139.8 million by the end of March, Pacific Regency had failed to garner enough of the small business market. Delinquent loans and unspecified ownership squabbles hurt Pacific Regency, wiping out its capital.

Pacific Regency has lost more than $2.5 million since it opened, and its assets had fallen to about $15 million. The bank had a book value of only $100,000 at the end of December, and Frank said two months ago the bank would probably run out of capital before it could be acquired.

Faced with a possible insolvency at Pacific Regency, regulators expedited the review process and granted approvals in late April.