Vallicorp Holdings' acquisition pace slowed a bit last week. The Fresno, Calif.-based banking company announced that merger discussions with Sunrise Bancorp had been terminated.
The two companies had announced on April 8 that a letter of intent had been signed. Vallicorp, central California's largest bank was interested in adding to its $1.3 billion organization with $150 million Sunrise, parent of Sunrise Bank of Commerce, Roseville.
Wolfgang T.N. Muelleck, chief financial officer, Vallicorp, would say only that the two companies had been in discussions since April 8, but were unable to reach a mutual agreement.
"Merger talks have been terminated," he said. "Whether there will be any further discussions is something I can't comment on."
Ray Cabillot, research analyst with Piper Jaffray Inc., Minneapolis, said the move didn't catch him off guard.
"It's not that there was anything wrong with Sunrise, but it seemed like it wasn't the best fit," he said. "It sounds like after they signed the letter of intent and the real process of getting to know one another started, they both realized their cultures didn't fit."
There had been questions from analysts and industry insiders when the merger deal was first announced. Sunrise has shrunk its assets in recent months and may not have been the most attractive candidate in an area where several community banks are available.
Sunrise chief executive Hal Giomi could not be reached for comment.
The company's stock fell more than $1.25 since Wednesday.
The original announcement came less than a week after Vallicorp announced plans to acquire a bank up the road from Sunrise - Auburn Bancorp, parent of $76 million Bank of Commerce - for $12.5 million. Like Roseville, Auburn is northeast of Sacramento.
Vallicorp has said it is interested in enhancing its operations in the northern San Joaquin Valley. It already has a sizable share of the market in the region's southern and central parts.
Mr. Cabillot said he expected Vallicorp to show continued interest in the Sacramento area.
"It's one of the few markets left where you can move in and gain dominant share," he said.
Other recent acquisitions by Vallicorp include Commerce Bank of San Luis Obispo and El Capitan National Bank, Sonora.
Vallicorp has 54 full-service branches.