Fidelity Federal Will Buy Rancho Bernardo Savings

Rancho Bernardo Savings Bank has agreed to be acquired by Citadel Holding Corp., the parent of Fidelity Federal Savings of Glendale, for $23 a share or $6.5 million, Rancho Bernardo Savings Chairman H. M. Darmstandler said Wednesday.

The savings bank’s offices in Rancho Bernardo, Escondido and Rancho Penasquitos would become Fidelity Federal offices once the proposed acquisition is completed late this year, Darmstandler said.

The proposed sale must be approved by Rancho Bernardo Savings’ shareholders at an upcoming meeting. Federal and state regulatory approvals also are required.

Citadel has agreed to pay 1.5 times book value for Rancho Bernardo Savings, Darmstandler said. “I think that’s very good, given the prices for S&Ls; these days,” Darmstandler said. “Our initial stock price was $10 in 1983, and we’ve had one (20%) stock split, so (shareholders) will be getting close to three times what they paid initially.”

The savings bank’s board accepted Citadel’s offer “because quite frankly, we’ve been looking for some way to provide a return to our shareholders,” Darmstandler said. “I have the feeling that consolidation will be the name of the game in coming years.”

Rancho Bernardo Savings, which opened for business in 1983, reported a $558,000 net profit for 1988, down from a $704,000 net profit during 1987. Darmstandler linked the profit decline to the opening of a new branch in Escondido.

The savings bank had $124 million in assets on Dec. 31, 1988, up from $110 million in assets at the end of 1987. Total loans rose to $105 million, up from $94 million and deposits rose to $106 million, up from $100 million.