Grossmont, Rancho Santa Fe Banks Call Off Merger Talks

Grossmont Bank and Rancho Sante Fe National Bank have called off preliminary merger discussions aimed at creating a locally based bank with $412 million in assets and 11 branches in San Diego County.

Unfavorable tax consequences included in the Tax Reform Act of 1986 forced the banks to break off discussions that began in February, officials at both banks said Friday.

Grossmont Bank President Don Clague said it is “too early” to determine whether the La Mesa-based bank will seek another merger partner.

Rancho Santa Fe National “really wasn’t looking for a merger partner,” Jim Boyce, the bank’s president, said Friday. “We are not in a sale mode. . . . We’ve been approached several times by others, but we weren’t really looking” for a merger partner.

In mid-February, the two banks announced that they had begun preliminary negotiations that might lead to a definitive agreement. Grossmont, owned by Bancomer of Mexico, would have become the surviving bank had a merger occurred.

Rancho Sante Fe, with headquarters in Rancho Santa Fe, operates two branch offices. It reported $110 million in assets and $835,000 in net income Dec. 31, 1988. Grossmont, with nine branches, reported $302 million in assets and $4.1 million in income for the most recent year.