Security Pacific Agrees to Purchase Santa Clarita Bank

Security Pacific Corp. said Tuesday that it agreed to pay $52.5 million in stock to buy Santa Clarita National Bank, giving it a strong foothold in one of Southern California’s fastest-growing areas.

The highly profitable Valencia-based bank is another in a growing list of small- to medium-sized institutions in California being acquired by the state’s largest banks. Those major banks, notably Security Pacific in Los Angeles and Wells Fargo in San Francisco, are aggressively buying smaller banks to expand in areas where their presence is thinnest.

Security Pacific, for example, is expanding in San Diego County through the acquisition of two banks there, Southwestern Bancorp and La Jolla Bancorp. Wells Fargo is buying banks in Glendale and Bakersfield.

Santa Clarita’s 11 branches are spread through the Santa Clarita Valley, which includes such communities as Newhall and Valencia, and the San Fernando Valley. The bank is considered by banking officials to have the largest market share in the Santa Clarita Valley, where Security Pacific has three branches now. Santa Clarita National earned $4.2 million during 1989 and had $258.2 million in assets.

The 11 branches will operate under the Security Pacific name.

Security Pacific is paying 2.3 times Santa Clarita’s fully diluted book value, a measurement calculated by deducting an institution’s liabilities from total assets. While that is considered a healthy price, it is below many of the recent acquisitions of medium-sized banks.