It is rare that losing your job feels like an accomplishment.
Yet that was Mary Lynn Lenz's take on events Tuesday, after the California bank she runs, Professional Business Bank of Pasadena, agreed to merge with Bank of Manhattan of El Segundo. She will step aside as the chief executive of Professional when the deal is completed.
Lenz says she has no hard feelings. She joined Professional more than two years ago with the goal of fixing it up enough to roll it up with other banks. That mission will be fulfilled once it merges with Bank of Manhattan, a one-branch operation that is also controlled by the financier Edward Carpenter, a serial bank acquirer who runs the investment firm Carpenter & Co.
"This was my second turnaround," Lenz says. "I'm grinning ear to ear today. You wouldn't think so because I'm not staying with the organization."
She has a couple reasons to be happy. She is leaving Professional in better shape than she found it, while further burnishing her reputation as a fix-it specialist for small banks. That is a hot skill to have in Southern California at the moment: the market is rife with small banks on the rocks and buyout shops on the prowl.
Lenz got her current job after getting credit for turning around Slade Ferry Bancorp. in Somerset, Mass. ahead of its sale to Independent Bank Corp. in 2008. Prior to that she spent a decade at KeyCorp and helped run Citizens Financial Corp.'s Massachusetts operations. What now?
"I haven't even thought of it yet," Lenz says. "I'm going to be looking for new opportunities in California. … It's an exciting time for California banking."
Bank of Manhattan and Professional are among five community banks in California that Carpenter & Co. has taken stakes in since raising $280 million to invest in local banks in 2008. Carpenter & Co. controls 44% of Bank of Manhattan's holding company and it owns all of Professional, having acquired it from another private equity firm in December.
It will own 64% of the merged entity: A $400 million-asset, five-branch bank that will do business under both names. The transaction gives both companies more of what all banks need to survive in the current environment: Scale and diversity.
"There is power in numbers," Lenz says.
Professional has branches in lucrative markets outside of Bank of Manhattan's current reach. Bank of Manhattan has a capital markets arm that can securitize and sell property loans, a service Professional lacks. They are both trying to serve similar customers: small and midsize companies in and around Los Angeles.
Lenz helped put together Professional's sale to Carpenter in a reverse merger with a much smaller start-up bank it controlled in Pasadena called California General Bank. That deal provided an exit for Belvedere Capital, which tapped Lenz in 2009 to run Professional and oversee an acquisition spree that never materialized. Instead, Professional came close to failing because it lost too much money on bad commercial real estate. Lenz took the job in winter, and by the summer she was operating under a cease-and-desist order.
She helped persuade Belvedere to put more money into Professional as she helped shop it to dozens of other potential investors before settling on a deal with Carpenter late last year.
She spent this year cutting Professional's costs and balance sheet while looking for another bank to merge with. She found unwilling sellers and franchises that did not fit.
"This just made perfect sense," she says. "It is an extension of our geography. We share similar business platforms."
Terry Robinson, the president and CEO of Bank of Manhattan, will assume those titles at the combined bank. The deal is to close in the first quarter. The value of the all-stock transaction was not disclosed.