In California's wild community bank merger wave, a deal can come from an unlikely place. For Los Angeles's Metrobank, it came from Denmark.

Metrobank, a relatively conservative, slow-growth institution since it was founded in 1979, made plans for its first acquisition last week, signing a letter of intent to buy National Bank of Long Beach from a Danish insurance


The acquisition will put Metrobank above the $1 billionasset mark and in league with some of the more prominent community banks in the topsy-turvy Los Angeles market. The deal also shows that community banks in California- even if they need to raise capital to do it - are eager to justify themselves in the quickly consolidating Southern California community bank market.

"This is our first acquisition," said David Malone, Metrobank's chief financial officer. "We determined last year that we were interested in buying another franchise." This acquisition "will keep us busy for a while, but we are interested in acquiring other institutions."

National Bank of Long Beach was founded in 1977, but since 1982 it's been owned by Danish interests. Activ Banken was the first owner, and in 1990 Active Banken was sold to Danish insurance concern Topdanmark A/S. Topdanmark, like a bevy of other European companies with banking interests in the United States, is pulling out of international theaters. According to National Bank of Long Beach chief executive Donn Loe, Topdanmark also is selling its Stuttgard, Germany, bank.

"We have been a wholly owned subsidiary for 12 years," Mr. Loe said. "Our owners felt it was simply time to sell the bank. It's been a successrid bank, but the timing issues were such that it was put up for sale."

Mr. Loe and chief administrative officer John Cronin, both veterans of big banks, came on board in 1992 after loan losses severely affected the bottom line. Like most California banks with a heavy emphasis on private banking,

National Bank of Long Beach took significant hits in real estate, losing about $5 million in the two years ended 1992.

The bank since has become profitable, posting a .32% return on assets in the first quarter. "We are clearly not a retail bank," Mr. Loe said. "We focus on middlemarket, Southern California businesses, high-net-worth individuals and international business."

Not surprisingly, Metrobank has the same niches. But Metrobank is getting some bells and whistles in National Bank of Long Beach's package.

First, the bank has a state-ofthe-an foreign currency exchange operation. It also has an SBA department. In addition, said Metrobank chief executive David Buell, the purchase will give Metrobank a significant presence in Long Beach, one of the country's biggest seaports.

"Our acquisition gives Metrobank an entree into this productive market," Buell said.

Mr. Malone said while terms of the deal haven't been worked out. Metrobank will have to raise its 7.2% core capital ratio to complete the acquisition.

"We're contemplating the costs and benefits of either a private placement or a fully underwritten public offering," Mr. Malone said. "We want it to qualify as Tier 1 capital, so it will be in common stock form."

Metrobank's stock, while publicly held, is very thinly traded. No analysts follow the bank closely.

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