A proposed merger between Encino-based Valley State Bank and Olympic National Bancorp, a Westside bank-holding company, has been delayed indefinitely, according to a statement released Monday by both organizations.
But the statement, issued by Olympic Chairman David C. Pierson and Valley State Chairman John C. Bedrosian, said "the banks intend to stay in close communication and have not abandoned their intention to combine in the future. . . . "
"This transaction remains a high priority," the statement said. "However, we do not feel any need to be bound by an internally imposed deadline."
When the merger plans were announced in July, the participants predicted that a final agreement would be completed by the end of August.
"We had an aggressive timetable," said Jules Huppert, the president and chief executive of Valley State. "We think it will still happen. It will just take a lot longer."
Valley State Bank, the fifth largest bank based in the San Fernando Valley with assets of $113.9 million, has been depending heavily on the deal to solve its financial problems. The bank has sustained losses of $976,035 over the last two years, although it came back with earnings of $618,270 during the first six months of 1985.
When the merger plans were first announced, Huppert predicted, "We're going to emerge from the pack of little community banks and become a regional bank."
Olympic, founded two years ago, lost $1.55 million in 1983 and 1984, but earned about $400,000 in the first half of 1985. The bank has assets of about $105 million.
Officials at Olympic National could not be reached for comment.