City National to Buy Harbor Bancorp

The parent of City National Bank, moving to broaden its small-business clientele in Southern California, said Friday that it has agreed to acquire Long Beach-based Harbor Bancorp for cash and stock valued at $34 million, or $24.10 a share.

The acquisition would enhance City National Bancorp’s presence in the South Bay and Orange County, and boost the Beverly Hills-based bank’s total assets to $5 billion.

City National, which has been known for serving businesses in the entertainment industry as well as high-income individuals, said it is particularly keen on entering Long Beach, a city that has seen an economic revival and is home to many thriving businesses tied to its port.

Harbor Bancorp is the parent of Harbor Bank, which has assets of $213 million and operates two branches in Long Beach and four in Orange County.

Harbor Bank, a profitable community bank that was founded in 1974, serves several thousand small-business customers.

Some of its 98 employees are expected to be laid off.

Harbor would be City National’s third acquisition in the last 12 months. Earlier, City National purchased Ventura County National Bancorp in a $47-million deal and Riverside National Bank for $39 million.

With the addition of Harbor Bank, City National would have 39 branches in Southern California, almost double the number of a year ago.

Russell Goldsmith, City National’s chairman and chief executive, said the acquisition, which is subject to shareholder and regulatory approval, would immediately accrue to earnings.

Harbor shareholders would receive cash, City National stock or a combination of the two.

The deal is expected to be completed in January.

City National’s stock rose 31 cents to close at $27.94 on the New York Stock Exchange.

Harbor shares rose $2.75 to close at $22.38 on the Nasdaq Bulletin Board.