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Citizens Holdings of Costa Mesa to Buy El Camino Bancorp Stock

September 09, 1987|JAMES S. GRANELLI | Times Staff Writer

El Camino Bank, the profitable, 17-year-old Anaheim institution long courted by many suitors, will be acquired by Citizens Holdings in Costa Mesa, the two companies said Tuesday.

Under terms of a definitive agreement, Citizens will buy all the stock of El Camino Bancorp, the bank's holding company, for $16.2 million--about $8.25 a share--and will maintain El Camino's top management and keep its operations separate from Citizens' subsidiary, Citizens Bank of Costa Mesa.

El Camino will also lose its status as the oldest independent bank in Orange County.

The acquisition, which the two holding companies previously announced as a tentative agreement, will create a banking concern with $228.4 million in assets and $205.3 million in deposits--the third-largest Orange County-based banking operation.

The agreement is subject to approval by state and federal regulators and by El Camino shareholders. Executives at both banks expect that approval to be granted in December or January. After Oct. 15, El Camino shareholders will also share in a $4,500-a-day dividend until the deal is approved. Most of the 1.97 million shares are owned by El Camino directors, all of whom signed the agreement.

For the Record
Los Angeles Times Thursday September 10, 1987 Orange County Edition Business Part 4 Page 4 Column 3 Financial Desk 2 inches; 40 words Type of Material: Correction
A story in Wednesday's edition of The Times reported an outdated price per share in the acquisition of El Camino Bancorp in Anaheim by Citizens Holdings in Costa Mesa. The $16.2-million purchase price will amount to about $7.95 a share if the deal closes, as expected, in early January.

Through two stock dividends and two stock splits over the years, original shareholders of El Camino have 560-600 shares for every 100 shares they bought to start the bank, said Gerry Findley, a Brea-based financial institutions analyst.

"That means they'll get about $5,000 back for every $1,000 invested," he said.

Findley said he sees the two banks as complementing each other, especially because three-branch Citizens Bank has been moving more toward a business banking base. El Camino, with five offices spread through Anaheim, Fullerton and Tustin, has emphasized its retail banking operations.

Both banks are among the county's oldest and strongest banks. In the first six months of this year, El Camino and the 15-year-old Citizens Bank posted a combined net income of $1.7 million.

Citizens Holdings was formed last year by Australian industrialist Richard Pratt, who used it to buy Citizens Bank.

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