AmericanWest Bank, which bought Escondido's Sunrise Bank from its struggling parent in Michigan last summer, announced plans Tuesday to acquire Security Business Bank, creating a larger foothold of eight branches in San Diego County.
The deal is expected to close in the third quarter, which ends Sept. 30, after regulatory approval. Terms of the transaction were not disclosed.
As of Dec. 31, AmericanWest had assets of $2.3 billion and deposits of $2 billion. For that same period, Security Business Bank had assets of $233 million and deposits of $181 million.
Last summer, AmericanWest, flush with cash and looking for acquisitions, vowed to make more buys of local banks following its June acquisition of Sunrise for $18.5 million. Sunrise, whose former parent was Lansing, Mich.-based Capitol Bancorp Ltd., has four offices in Escondido, Point Loma, Palm Desert and San Diego.
Security Business, which opened a branch in Escondido last summer, reported a profit of $141,000 in the fourth quarter, which ended Dec. 31 versus a loss of $765,000 for the same year-earlier period. Security Business also has branches in downtown San Diego, Carlsbad and Carmel Valley.
Scott A. Kisting, chairman and chief executive of AmericanWest, which is based in Spokane, Wash., said in an interview at the time of the Sunrise acquisition that Sunrise wouldn't be the last purchase locally. He reconfirmed that commitment Tuesday. "For us, we think it's a great market. We doubled the size of our organization. Certainly we would look to do more down here," Kisting said.
Kisting said the bank's sweet spot for acquisitions is in the range of $300 million to $750 million in assets. He indicated that he's scouting for opportunities in Orange County and Inland Empire, including Southwest Riverside, where there's a strong base of agricultural borrowers to build on. Kisting said that AmericanWest is seeing strong growth in the agricultural lending area in the Pacific Northwest, and may find a complementary fit to fold into the banking company from the Temecula region.
Privately held AmericanWest has 70 branches in California, Washington, Idaho and Utah. With its foray into California with Sunrise and now Security Business, the holding company for AmericanWest has been on a buying spree, cobbling together banking assets since 2010 under the helm of California banking veteran Kisting, who has a home in Corona del Mar in Orange County.
Security Business has become a major lender for the Small Business Administration in San Diego County.
In December 2010, Kisting formed SKBHC Holdings LLC to buy AmericanWest and other institutions. His holding company, made up of himself and other private investors, immediately infused $185 million of capital into AmericanWest. With an additional $500 million in funding commitments available through SKBHC, AmericanWest is focused on growing organically and through acquisitions.
Kisting has a more than two-decade banking career in California overseeing corporate and retail banking operations with Bank of America; Norwest Corp., which bought Wells Fargo in 1998; and California Federal Bank, which was sold a decade ago to Citibank.
Paul Rodeno, CEO of Security Business, said discussions to merge began in earnest in recent months, with breakfast held at the Twenty/20 Grill & Wine Bar between he and Kisting at the Sheraton Carlsbad Resort and Spa. "I met Scott for breakfast a few times and we got know each other," Rodeno said. "We have very similar cultures, and we both have two strong companies."
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