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Bank to Be Sold for $16 Million in Cash Deal : Encino Institution to Buy CommerceBank

November 05, 1987|JAMES S. GRANELLI | Times Staff Writer

Encino-based Independence Bank, which long has coveted an Orange County presence, has signed a preliminary agreement to buy CommerceBank of Newport Beach for more than $16 million in a deal that would create one of the 25 largest banks in the state.

Independence, with assets of $400 million, would be the surviving entity in the merger. It plans to keep all of CommerceBank employees, including top management, according to a statement issued by the two banks.

CommerceBank, which has $210 million in assets, would add three branches to the 15 Independence now has. The tentative agreement calls for its shareholders to receive as much as $16 a share in cash, with the final price depending on the bank's performance and other factors.

Both banks have been very profitable; the new institution would have about $34 million in capital.

"We are delighted to achieve the dual goals of strengthening our capital position to enhance our ability to serve our customers and giving our investors a healthy return," said Clyde H. Gossert, CommerceBank president.

"Independence has been trying to get into Orange County for a long time," said Gerry Findley, a Brea-based financial institutions consultant. "They've been looking for a Newport Beach location."

After negotiations during the summer to purchase American Merchant Bank in Newport Beach fell through, Findley said, Independence executives started talking with the operators of 8-year-old CommerceBank. American Merchant, meantime, agreed to merge with Eldorado Bancorp of Laguna Hills.

The merger is subject to the negotiation of a definitive agreement and to approval by CommerceBank shareholders and by state and federal regulators.

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