Rancho Santa Fe National Bank has begun negotiations toward a merger with La Mesa-based Grossmont Bank, officials said Monday. If completed, the proposed deal would create a bank with $412 million in assets and 11 branch offices in San Diego County.
The preliminary negotiations are subject to the execution of a definitive agreement, as well as approval by both banks' shareholders, the California State Banking Department, the Federal Deposit Insurance Corp. and the Federal Reserve Board. Grossmont would become the surviving bank, according to terms of the proposal.
Rancho Santa Fe National, which is headquartered in Rancho Santa Fe, operates two branch offices. On Dec. 31, the bank reported $110 million in assets and $835,000 in net income. Grossmont reported $302 million in assets and $4.1 million in net assets.
Rancho Santa Fe National last year failed to complete a proposed $12-million sale to Costa Mesa-based Citizens Holdings for $12 million. Rancho Santa Fe National's shareholders would have received $21.70 per share had that deal been completed.
Citizens, which had signed a letter of intent to acquire Rancho Santa Fe National, blamed new federal banking policies when it abandoned the deal in late October.
That deal marked the third time in recent years that Rancho Santa Fe National failed to complete a proposed merger or acquisition. In 1985, it abandoned a previously announced acquisition of Hidden Valley National Bank of Escondido. A year later, it opened its branch office in Escondido.
In 1986, Rancho Santa Fe National backed away from a planned merger involving three other San Diego County banks. First National Corp., National Bank of Fairbanks Ranch and National Bankshares of La Jolla eventually completed that merger in 1987.