Several Banks Are to Be Consolidated Into Eldorado

The East Coast investor group that started buying a string of Southern California community banks two years ago is folding them all under the name of its latest acquisition, Eldorado Bank.

Eldorado’s new parent company Commerce Security Bancorp also is making plans to go public, probably early next year, Curt A. Christianssen, chief financial officer for the company and the bank, said Tuesday.

Christianssen said it will take about 90 days to consolidate the operations of Liberty National Bank in Huntington Beach, San Deguito National Bank in Encinitas and Commerce Security Bank in Sacramento into Eldorado.

Some administrative and headquarters jobs will be lost in the consolidation, but executives don’t have a solid number yet, Christianssen said. Robert P. Keller, chairman of the company and the bank, said much of the job loss would come through attrition.

The acquisition of Eldorado nearly doubled the size of Commerce Security and gave it an extensive branch network that the other subsidiary banks didn’t have.

The combined operation, with 18 branches in five counties, will allow the bank to offer bigger business loans and a wider range of services, from international banking to equipment leasing.

It also gives the bank about $900 million in loans and other assets, putting it in range of Keller’s plan to build a regional bank with more than $1.5 billion in assets.

“Our operating strategy still has a community bank orientation,” Christianssen said. “We will have representatives on the board from each community as well as an advisory board from each of the areas.”

He downplayed the long-held speculation that Keller, who built banks in New Hampshire and Arizona and sold them, was simply amassing a large enough operation to sell, especially to an out-of-state bank looking for foothold in the lucrative California market.

“We’re not building this for a quick sale,” Christianssen said. “But if someone came in and offered us three times book [shareholder equity], we’d have a hard time saying no.”

Keller said bluntly: “I’m not going out soliciting any offers.”

He said there is “nothing magic” about attaining a certain size. “To compete effectively, you’ve got to be $1.5 billion to $2 billion in size. You need that mass to attract people with the knowledge and expertise to keep us competitive.”

Keller and his Dartmouth Capital Group, a limited partnership based outside Manchester, N.H., came to California in 1995 and picked up tiny San Deguito National Bank. The following year, Dartmouth bought Liberty.

Following their plan to establish bases in Northern and Southern California, the group then bought Commerce Security. The Eldorado purchase was completed last month.

Each bank has areas of expertise that the others don’t have. Eldorado, for instance, offers international banking while Liberty specializes in small-business lending and Commerce Security has small equipment leases in 47 states. Putting the banks together, Christianssen said, gave the company the opportunity to offer such services to all its customers.

Eldorado will be looking for other banks to acquire, he said, especially in the Sacramento area where Commerce Security will retain its name and operate as a division of Eldorado.

The acquisitions have made Commerce Security the biggest banking concern based in Orange County, but only for a short time. Western Bancorp, the parent company of Monarch Bank in Laguna Niguel, is acquiring Southern California Bank in Anaheim in a deal that would give it $1.35 billion in assets.