Citing increased profitability but an ongoing need to improve efficiency and cut costs, Paso Robles-based Heritage Oaks Bancorp said it is closing three of its 14 banks, has eliminated a top administrative position and has begun plans to grow loans and deposits in Santa Barbara and Ventura counties.
The branches being closed over the next 90 days are in Morro Bay on Morro Bay Boulevard, in Santa Maria in the Oak Knolls Shopping Center and in Santa Barbara on Milpas Street.
In all, 16 full-time and part-time workers are employed at the branches. Most if not all will be moved to similar positions at nearby Heritage Oaks locations, according to Heritage Oaks Bancorp CEO/President Simone Lagomarsino.
The company noted that Lagomarsino has assumed the duties of Ron Oliveira, who had been president and chief operating officer of the bank for the past two years. His last day was Jan. 26.
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Lagomarsino declined to disclose the benefits of Oliveira’s severance package.
The combination of the branch consolidation and elimination of the chief operating officer position will save the company more than $1.75 million annually, Lagomarsino said, adding that some of the savings will be redeployed into one or more loan production offices. The bank is currently in negotiations for a loan production office in Ventura County and is looking for another potential location in southern Santa Barbara County.
“We had a good year,” she said. “The institution is healthy, and we look forward to expanding into southern Santa Barbara County.”
Net income at Heritage Oaks Bancorp last year was $7.7 million, compared with a net loss of $17.6 million in 2010. Total assets as of Dec. 31 were $987 million, up about $5 million from the year-earlier period. Total deposits as of Dec. 31 were $786 million, down about $12 million from the year before.
The company attributed its improved performance last year to lower operating costs, fewer expenses related to reserves for bad loans and an accounting adjustment related to taxes.