An unknown number of employees at Heritage Oaks Bank and Founders Community Bank are being laid off in the wake of recently announced mergers with larger financial institutions. Those affected typically held back-office jobs that are being consolidated. All are being offered severance packages, bank officials said.
“We let people know their status and told them what’s going to happen individually,” Heritage Oaks CEO Simone Lagomarsino said Tuesday. “I’m not looking at this as a matter of numbers and statistics.”
Paso-Robles based Heritage Oaks Bancorp, the largest bank on the Central Coast, is being acquired by Pacific Premier Bancorp of Irvine in a deal valued at $405.6 million, or $11.68 a share. Pacific Premier Bancorp, which has $3.8 billion in assets, is about twice the size of Heritage Oaks, which has $2 billion in assets, according to a Pacific Premier news release issued in mid-December.
All Heritage Oaks locations will be renamed Pacific Premier once the merger clears regulatory and shareholder approval. The merger is expected to close in the second quarter. Lagomarsino said previously that some of the bank’s 300 employees would be laid off to avoid duplication, but many branch and lending employees around San Luis Obispo County would keep their jobs.
Founders Community Bank, based in San Luis Obispo, is merging into Premier Valley Bank of Fresno in a deal valued at about $29.1 million. Founders reported nearly $200 million in total assets, while Premier Valley reported $635.6 million in total assets.
Unlike Heritage Oaks, however, Founders banks in San Luis Obispo, Paso Robles and Morro Bay will retain their name. Founders also has a small business lending center in Atascadero. The deal, announced in late October, is expected to close during the first quarter after obtaining regulatory and shareholder approval.
Representatives of both banks declined to state the exact number of layoffs.
The Heritage Oaks acquisition is “a market expansion, so we will be keeping a large portion of the workers,” said Steve Gardner, chairman and CEO of Pacific Premier. “We will be assisting those who are laid off in as many ways as possible.”
Tom Sherman, CEO of Founders, declined to say how many local positions might be eliminated at the end of the “realignment to enjoy economies of scale” with Premier Valley Bank, a wholly-owned subsidiary of Heartland Financial USA. Founders has a total of 45 employees, Sherman said.
Positions with face-to-face customer relations will be kept in place, including tellers and loan officers, he said. However, many administrative positions in the bank’s office headquarters at 237 Higuera St. are jobs that are duplicative of those at Premier Valley Bank, Sherman said.
Severance packages are negotiable and may be different for different employees, Sherman said. He acknowledged that for some severances, one week of pay was offered for one year of work.
Sherman, a co-founder, said that some of the employees have been with the bank since it was founded in 2005.
Sherman will remain CEO of the Founders Community Bank branch. He added that employees who accept severance likely will work for the company through April, and possibly into the summer, during the transitional phase of the merger.
Sherman said that it’s difficult for smaller community banks such as Founders to remain viable without consolidation, noting that such consolidation is occurring nationwide in the banking industry.
News assistant Robert Shutt contributed to this story.
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