SANTA ROSA -- AltaPacific Bancorp (OTCBB: ABNK), parent company of AltaPacific Bank, today announced a definitive agreement to acquire the parent company of Temecula, Calif.-based Mission Oaks National Bank.
AltaPacific will acquire Mission Oaks Bancorp for 30 cents per share in an all-cash transaction valued at around $3.5 million. The two-branch bank will operate as AltaPacific after the merger, which remains subject to Mission Oaks shareholder approval and is expected for completion in the second quarter of 2014.
It is the second merger for AltaPacific, following the Santa Rosa-based company's acquisition of Covina, Calif.-based Stellar Business Bank in Feb. 2012. The combined company will have around $335 million in assets, $213 in loans and $254 million in deposits.
"The merger with Mission Oaks Bancorp will create new opportunities to build on the successes that each company has achieved," said Charles Hall, president and chief executive of AltaPacific. "We share a commitment to serving our local communities with quality private and business banking products and delivering a high level of personal service. This transaction provides immediate value to customers and shareholders and is a continuation of our strategy to expand our geographic footprint in markets that represent long-term growth potential."
Organized in 2000, Mission Oaks was hit hard by the recent economic downturn and suffered five years of operating losses before reporting $55,000 in net income for 2013. The bank cut around $500,000 in salary expenses and other fees related to servicing problem assets last year, helping to improve earnings.
The bank noted several other improvements for the year, including the elimination of all foreclosed property on its books and an improvement in its net interest margin from 4.09 percent to 4.14 percent.
Nonperforming assets represented 6.6 percent of total assets at year-end. The bank had $85.5 million in deposits, $69.4 million in loans and $96 million in total assets at that time.
"That market was hit hard, but it's starting to come back," said Allen Christenson, chief financial officer of AltaPacific.
He credited Mission Oaks president and CEO Gary Deems in helping to point the bank towards recovery after assuming his position in Jan. 2012. Mr. Deems will continue after the transition in guiding the inland Southern California market for AltaPacific, Mr. Christenson said.
Like AltaPacific, Mission Oaks focuses primarily on commercial real estate lending. The two banks also have "preferred lender" status with the U.S. Small Business Administration, granting greater autonomy when underwriting those federally backed business loans.