SAN FRANCISCO -- Continuing its expansion in Northern California, Comerica Inc. has agreed to buy Palo Alto-based University Bank and Trust in a stock swap worth $73 million, or a hefty 2.1 times book value.
The acquisition of University, one of the area's premier community banks, is the Detroit-based bank's fourth in California in the past five years and its third in the San Jose area south of San Francisco.
When the deal closes in mid1995, subject to regulatory approval, Comerica BankCalifornia will have 31 offices in Northern California and three in the Los Angeles area.
University, based in one of California's most affluent areas, has $422 million in assets, three branches, and one trust office. The bank has maintained good credit quality and strong profitability despite California's downturn, building a reputation as a high-service alternative to the state's major banks.
Carl J. Schmitt, the bank's chairman and chief executive, is one of the state's most colorful bankers, known for his scathing criticisms of regulators and homespun marketing practices, most notably his annual gift of Walla Walla onions to customers.
Although buying University is an in-market transaction, Comerica California chief executive J. Michael Fulton said he doesn't expect many job cutbacks.
Mr. Fulton expects to consolidate University into Comerica at the end of 1995. But unlike the bank's previous California acquisitions, Comerica will keep University as a separate division with its own name and management. Mr. Schmitt will keep an office at the division's headquarters.