Comerica Moves to Expand California Presence : Finance: Resurgent Southland economy prompts purchase of L.A.-based Metrobank.
Sensing opportunity in a recovering Southern California economy, Detroit-based Comerica Inc. agreed to buy Metrobank, a young and growing Los Angeles banking firm that concentrates on commercial lending. Comerica valued the stock-swap deal at $120 million.
Comerica, a $34-billion-asset bank holding company that has established itself in Northern California through several recent acquisitions, sees the Metrobank purchase as a way to quickly boost its modest presence in Southern California.
“We see a recovery in Southern California, and by being in the marketplace, we think we’re going to get a jump on some companies that perhaps won’t wake up to it for another year or so,” J. Michael Fulton, president and chief executive of San Jose-based Comerica Bank-California, said Wednesday.
Metrobank stockholders will receive 0.789 shares of Comerica stock for each of their shares. At Comerica’s closing price Wednesday of $28.375, that works out to $22.39 a share. Metrobank shares surged $5.25 Wednesday on the American Stock Exchange, to close at $20.75. The deal, which is subject to regulatory approval, is expected to close next January.
Metrobank, with $1.3 billion in assets and seven offices, has grown steadily since its 1979 founding by serving a niche market of mid-size businesses and wealthy individuals. The bank, which has been profitable every year since its inception, has seven Southern California offices: two in Long Beach and one each in West Los Angeles, Woodland Hills, Torrance, Newport Beach and San Diego.
The bank was founded by Chairman and Chief Executive David L. Buell, 59, a former Marine Corps pilot and Chula Vista native who went on his own after a 12-year stint as an executive at Union Bank. He left as regional vice president of Union’s Santa Monica operation.
Buell is Metrobank’s second-largest shareholder with 11.6% of outstanding shares. The largest shareholder is Newport Beach real estate investor Robert L. Mayer, who owns 25.5%. Together, officers and other insiders own about half of Metrobank.
Metrobank earned $8.2 million in 1994 and $2.4 million for the first quarter of 1995. Those figures do not include the earnings of National Bank of Long Beach, which Metrobank acquired this year.
Metrobank will be Comerica’s fifth acquisition in California after Plaza Bank of Commerce in San Jose in January, 1991; Bank of Industry in City of Industry in July, 1991; Pacific Western Bank in San Jose in March, 1994, and University Bank & Trust of Palo Alto in March of this year.
Once the acquisition is complete at the end of this year, Comerica’s assets in California will rise to nearly $4 billion. Comerica is currently the 27th-largest U.S. bank in asset size. In addition to Michigan and California, Comerica has banking operations in Illinois, Texas and Florida.
Buell said the sale was negotiated “principal to principal,” by himself and Comerica executives, who “knew at some point it would get done.”
“We’ve been waiting for signs of recovery and the right kind of bank,” Comerica’s Fulton said.
Based on improving commercial real estate resales, lease rates and appraisals in Southern California, the timing seemed right, he said, adding that Metrobank is “a good fit” for Comerica because it has the same focus on mid-size companies. Fulton praised Metrobank’s steady profits and growth throughout the Southern California recession.
Comerica will probably make more deals, Fulton said. “There are clearly markets in the San Francisco and Los Angeles areas that we are not in today and where we can see continued growth,” he said.
Fulton said there would be “minimal layoffs” among Metrobank’s 380 employees but declined to be more specific.
