Heritage Oaks Bancorp, which is in the process of buying Mission Community Bancorp, will lay off about 65 employees in phases and consolidate 11 branches into five as it creates the largest locally managed community bank based on the Central Coast.
The deal, subject to regulatory approval, is expected to close Feb. 28.
Employees were notified Nov. 20, giving some of them 10 months’ notice as the layoffs will occur gradually – starting when the deal closes and ending sometime in September, according to Simone Lagomarsino, president and chief executive officer of Heritage Oaks. Together the banks employ about 350 people – 240 at Heritage Oaks and 113 at Mission, she said.
Those to be laid off are from both institutions, many holding jobs that are duplicative such as executive-level, operations and loan administration. Some branch employees also are affected, as Heritage Oaks wants to ensure that staff members from both banks work in the consolidated branches.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
“We met with every employee and got input from executives at Mission,’’ Lagomarsino said, noting that they tried to “put a human touch on these decisions” and do it responsibly. “We recognize that it’s peoples’ lives.”
Among the Mission executives leaving are chief executive officer Tom L. Dobyns, chief financial officer Thomas J. Tolda and chairman James W. Lokey. Among those joining Heritage Bank are Mission president Brooks W. Wise and senior vice president Bill Filippin.
The layoffs will occur in phases to avoid a large number of banking professionals seeking jobs in the market at once, she said. Any attrition that occurs over the 10-month time frame will create opportunities for some.
All affected employees will receive severance pay and job placement help. Some individuals who are key to completing the branch consolidation and converting customers to the new system were offered a retention bonus as well, Lagomarsino said.
The minimum severance pay will be two weeks per year, with a minimum of a month’s pay. Based on the nature of some peoples’ jobs, it will take them much longer to find another job, so the severance package was tiered, Lagomarsino said:
Those who are assistant vice presidents will get two weeks per year with a minimum of two months’ pay; those at the vice president level will receive two weeks per year with a minimum of three months’ pay; and senior vice presidents and above who didn’t have a change of control agreement (for some that was six months’ pay), will receive six months’ pay. The cap for all employees is six months’ pay.
Bank officials are still reviewing branch consolidation plans and remodeling that must be undertaken, so they aren’t yet ready to announce which branches will remain open.
The branches to be consolidated are those from Heritage Oaks and Mission that are within 1.5 miles of each other, Lagomarsino said. None of the consolidation will occur before summer.
Of the 11 branches to be consolidated, three are in Santa Maria and two each are in Arroyo Grande, Atascadero, Paso Robles and San Luis Obispo, she said, noting that customers will be given plenty of advance notice.
When the acquisition was announced Oct. 21, the transaction was valued at about $56.4 million, including $8 million in cash and 7.54 million shares of Heritage Oaks common stock. That was based on the bank stock's closing price of $6.42 a share Oct. 18.
The new organization, Heritage Oaks Bank, will have about $1.5 billion in assets, $1.3 billion in deposits and $1 billion in loans.