BANKING : Holding Company Has Long Row to Hoe in Merging Sister Banks

You would think it would be simple for the parent company of two banks to merge one subsidiary with the other.

But that’s not the case in these days of increased banking regulation.

The owner of Frontier Bank in La Palma wants to merge the institution into its Oxnard unit, Ventura County National Bank. That would be a small-scale version of, say, General Motors combining its Pontiac and Oldsmobile units.

But unlike GM, Ventura County Bancorp in Oxnard has to answer to federal regulators for the two wholly owned banks that it has operated separately since 1989. It cannot combine them without hiring lawyers, consultants and others to go through a process that is almost as detailed as a merger of two unrelated banks.

The sister banks even had to reach a definitive agreement and file it with regulators. About the only thing that the parent company can count on as being cheap and quick is shareholder approval.

The merger is expected to be approved by regulators in the next few months, however, and surviving Ventura County National is expected to continue operating Frontier’s La Palma and Wilmington branches as its own.