Vineyard National Bancorp in Rancho Cucamonga, Calif., said it plans to acquire the $228 million-asset Rancho Bank in San Dimas for about $57.8 million in cash.
The deal, announced Thursday, is expected to close next quarter. It would give the $1.9 billion-asset Vineyard four more branches, in Los Angeles and San Bernardino counties. It currently has 12, in Los Angeles, San Bernardino, San Diego, Riverside, and Orange counties.
More significantly, the deal would help Vineyard reduce its cost of funds, which was 2.59% at yearend. The bulk of its deposits are in interest-bearing accounts. Rancho Bank has a much higher ratio of core deposits, so its cost of funds was 0.8% at yearend.
Also Thursday, Vineyard said its first-quarter earnings fell 6% from a year earlier, to $4.2 million. Because the loan book grew 41%, to $1.5 billion, the company increased its loan-loss provision to $1.2 million, from zero a year ago earlier.
The earnings were also affected by a 33% increase in expenses, to $11.3 million, caused primarily by the cost of hiring more employees, converting loan production offices into branches, and opening a loan production office and an administration and operations center.
