Luther Burbank Deal, Nipped in Bud, Pops Up Again

Nearly two years after two California savings and loans called off a merger, the deal is back on.

Luther Burbank Savings, Santa Rosa, and New Horizons Savings and Loan Association, San Rafael, announced May 23 they had signed a definitive agreement to merge.

The two Northern California institutions had agreed to a merger in August 1994, but rapidly rising interest rates that fall put Luther Burbank's financing of the deal in jeopardy.

"The merger will strengthen our community-oriented thrifts," said Luther Burbank chief executive George Mancini. "The resulting institution will be capable of offering even greater service to the communities in Marin and Sonoma counties."

Under terms of the deal, Luther Burbank will pay nearly $30 million to shareholders of New Horizons' parent company, NHS Financial. The deal, worth $11.50 per share, is expected to close at the end of third quarter 1996.

Luther Burbank, named after a noted horticulturist, has one branch and $430 million in assets while New Horizons has three offices and $285 million in assets.

"New Horizons and Luther Burbank share similar growth goals, market niches, and business philosophies," said New Horizons CEO James W. Barnett. "Our combined operations will broaden lending capacity to the communities we serve."

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