The merger, subject to regulatory and stockholder approval, is expected to close in the second quarter of 2017. After it’s complete, former Heritage Oaks shareholders would own about 30 percent of Pacific Premier’s stock.
Cambria’s Heritage Oaks branch is at 2255 Main St., a circa-1979 building that Heritage Oaks bought from Bank of America in 2013. Prior to that, Heritage Oaks had been located in a Cambria Village Square space on Tamsen Drive. That building (which, even longer ago, had been occupied by Wells Fargo Bank) is still vacant.
North Coast business leaders and Heritage Oaks customers said Tuesday, Dec. 27, that they don’t expect to see many changes as a result of the sale, but say they’ll wait to form final opinions, especially when it comes to the bank retaining its current employees.
Mary Ann Carson, executive director of the Cambria Chamber of Commerce, said, “We’re in wait and see mode.” But at the recent Heritage Oaks chamber “mixer” party, “they had someone from corporate there, who said it would be exactly the same, the same hometown service, because the new owners would have the same philosophy.”
Carol Broadhurst and husband Michael Broadhurst manage the Cambria Farmers Market and own/operate their Dragon Springs Farm on Santa Rosa Creek Road. They have been Heritage Oaks customers since 2001, and she said Tuesday the bank was helpful in refinancing the family farm.
About the pending sale, Broadhurst said that “initially, I was scared that we’d lose our bank, but (assistant vice president) Craig Marlo assures us that this bank wants these branch offices. He assured me that they’re going to keep the branch.
“I expect the fees will go up,” she continued, “but that we’re going to get some more loan products.”
“As long as they keep their neighborhood-friendly feel,” she said, “it will be wonderful. I think that’s the main thing, that they keep their small-town country charm.”
Del Clegg, owner of Cookie Crock Markets and president of the Coast Unified School District Board of Trustees, said he doesn’t anticipate any change in how the bank is operated: “They have nice people at the branch office here now, and they have to have people manning the shop.”
He said he understands why more banks are merging these days, because it’s “been tough, with government regulations imposed on them since the recession, and with the interest rate so low.” Clegg said he’s also heard that other small banks in the county may be merging with larger ones.
In July, Sierra Bancorp completed its acquisition of Coast Bancorp of San Luis Obispo County, merging the latter’s wholly owned subsidiary, Coast National Bank, into the former’s wholly owned subsidiary, Bank of the Sierra.
San Simeon native Sharon Vandercook succinctly summed her thoughts on local impact from the sale of the bank, saying, “One’s probably as good as another, as far as I’m concerned anymore. It’s certainly convenient having it downtown.”
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 Tuesday.
Heritage Oaks opened its first bank in Paso Robles in 1983. It has since grown to become the largest bank on the Central Coast, with 12 branches in San Luis Obispo and Santa Barbara counties and a loan production office in Ventura County.
Pacific Premier has 16 branches throughout Southern California, including banks in Orange, Riverside and San Diego counties. The bank has been in the process of expanding since 2011, when it began acquiring other banks throughout the region.
“We have known the executive management team at Heritage Oaks for many years,” Pacific Premier chairman and CEO Steve Gardner said in a statement. “We believe their bank will be an excellent fit with our existing franchise. As the largest bank headquartered in California’s Central Coast, Heritage Oaks has built a leading market share and a high quality, low-cost core deposit base.”
Heritage Oaks CEO Simone Lagomarsino said she and Gardner had previously discussed merging the banks during the 20 years they’ve worked together, and they decided now was the best time. Interest rates remain low after the housing market crash and recession, which means banks are pursuing mergers that help cut costs in today’s competitive environment.
“We felt like we found a great partner in Pacific Premier,” Lagomarsino said.
All Heritage Oaks locations will be renamed Pacific Premier once the merger is approved, she said.
Some of the bank’s 300 employees will be laid off to avoid duplication, but many branch and lending employees around San Luis Obispo County will keep their jobs, Lagomarsino said. She declined to elaborate, saying those plans have not been finalized.
Employees will be informed about the state of their positions by Feb. 1.
Heritage Oaks Chairman Michael Morris, board member Mike Pfau and Lagomarsino will become members of Pacific Premier’s board.
Lagomarsino said she’ll stay in her position and help some employees relocate until the merger is complete. Then she’ll likely take some time off to assess her options, she said.
Heritage Oaks customers will be in good hands with Pacific Premier, Lagomarsino said.
“They’re a very strong, community-oriented bank,” she said.