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Centennial Beneficial Signs to Buy Sacramento Bank

March 15, 1985|JOHN O'DELL | Times Staff Writer

Centennial Beneficial Corp. of Orange said Thursday that it has signed a tentative agreement to purchase Sacramento Valley Bank, with four offices and assets of $67 million, in the second major acquisition announced by the fast-growing financial services holding company in the past year.

The purchase, along with the soon-to-be-completed $10.75-million acquisition of Sunwest Bank of Tustin, would more than quadruple the 4-year-old diversified holding company's assets to about $277 million.

Centennial Chairman John Joseph declined to disclose terms of the proposed acquisition but indicated that the price would range from $3 million to $7 million. A consultant who looked at the bank for a potential buyer said it has a sizable number of problem loans, which could make it difficult for the seller, Central Pacific Corp. of Bakersfield, to justify a price much higher than the bank's $3.5-million book value. Sacramento Valley has been on the market about a month, according to Central Pacific.

Centennial, with about $60 million in assets, owns 75% of Sacramento First National Bank, of which Sacramento Valley would become a subsidiary, and is sole owner of a thrift and loan association, a mortgage company and two consumer finance companies, all in Orange County.

Sacramento Valley was founded in 1981 as a wholly owned subsidiary of Central Pacific. Central Pacific also owns American National Bank of Bakersfield, which has 27 offices and more than $600 million in assets.

Richard Anthony, vice president of Central Pacific, confirmed that Sacramento Valley has a "large number of non-performing loans" but said the bank inherited them from previous management in 1981, when it was formed out of the four Sacramento branches of American National.

Anthony said that while Sacramento Valley has not made a profit since it was founded, it has been cleaning up its loan portfolio and expects to post an annual profit of "a little less than $200,000" for 1985.

Federal Approval Required

Joseph said Thursday that Centennial hopes to negotiate a definitive agreement within the next week and to complete the acquisition within 90 days. The deal would have to be approved by several federal banking agencies.

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