American Perspective Bank, a San Luis Obispo County lender founded five years ago, is being purchased by Portland-based Umpqua Holdings Corp. for $44.7 million.

If the deal gains the approval of banking regulators and American Perspective shareholders, Umpqua will pay $10 per share in cash for the San Luis Obispo-based bank, a 12.4 percent premium over its recent share price in the $8.90 range.

Umpqua Bank President and CEO Ray Davis said his company has been growing its California presence, mostly in the northern half of the state. The opportunity to buy a profitable young bank fits with Umpqua’s plans to expand down the coast.

“American Perspective bank is very well-run and has performed very well,” Davis said. “And the Central Coast is a very unique market. We’ve looked at this market for a while.”

For Umpqua, the deal means its first foray into California south of the San Francisco Bay Area. The bank, which has done 23 acquisitions since 2000, has a viticulture lending group that services the Napa-Sonoma wine region and could become a major lender for the Central Coast’s viticulture industry as well. Umpqua also announced last year that it was ramping up commercial real estate lending at a time when other banks were pulling back.

For American Perspective, the deal would team up a relatively young bank with a much larger institution. Investors would get a premium over the company’s recent share price, but those investors that have been with the bank since it opened its doors in 2007 would come out about even — the bank was originally capitalized with $42.2 million.

Umpqua brings wealth management services and a larger residential and commercial lending portfolio to the region, said Mark Crawford, American Perspective’s CEO. “As a larger bank, they have a much larger lending limit,” he said.

Under the deal announced on April 10, American Perspective’s three Central Coast branches will be rebranded as Umpqua Bank in the second half of the year.

The locations, or “stores,” as Umpqua likes to refer to its branches, will be updated to fit the hip feel the Oregon bank has cultivated. The company’s 196 branches offer events, ranging from Wii video-game tournaments to live music, more typical of bars or coffee shops. “One of the ways people have described us is a Starbuck with tellers, or like an Apple store,” Davis said.

Since 1996, when Umpqua’s first loungelike branch opened, deposits per location have more than doubled and its model has been imitated by, among others, ING Direct USA.

Employees will stay

Davis said American Perspective’s customer-facing employees can expect to keep their jobs after the deal. American Perspective had 38 full-time equivalent employees at the end of last year, according to regulatory filings.

Whether Crawford and other management and executives will retain their positions is still in discussion, Davis said.

With its arrival on the Central Coast, Umpqua hopes to bring a larger balance sheet and lending ability to the region, he said. The Portland-based lender, with $11.5 billion in assets, has branches in Oregon, Washington, Northern Nevada and Northern California.

Umpqua is publicly traded, with a market capitalization of $1.4 billion. It reported $74.5 million in profits last year.

American Perspective Bank, formerly American Principle Bank, was founded in 2007. It is one of the mid-sized lenders in the region, ranking at No. 6 on the list of banks based in the Tri-Counties with $259.2 million in assets as of the end of 2012.

While keeping a fairly small and low profile over the last few years, the bank has been profitable, earning $2.8 million last year and $478,000 in 2010.

It has three branches, in San Luis Obispo, Santa Maria and Paso Robles. Publicly traded on the over-the-counter bulletin board, American Perspective has a market capitalization of around $42 million.

The combined bank would have assets of about $11.8 billion.

M&A on the rise

The Tri-Counties, especially San Luis Obispo County, have become a hotspot for bank mergers and acquisitions since the financial crisis. The largest bank in the region, Pacific Capital Bancorp, is in talks with the parent company of Union Bank to sell the Santa Barbara Bank & Trust franchise in a $1.5 billion deal that is expected to close this year.

In 2007, Dutch banking giant Rabobank bought Arroyo Grande-based Mid-State Bank & Trust for $857 million. That same year, Paso Robles-based Heritage Oaks Bancorp purchased Business First Bank in Santa Barbara for $20.7 million, establishing its business banking practice there.

Mission Community Bancorp, which has said it plans to expand down the coast, doubled its size to $455 million in assets when it purchased financially troubled Santa Lucia Bank last year for $800,000.
And Westlake Village-based First California Bank moved in to the Central Coast market with the purchase last year of failed San Luis Trust Bank in 2011 in an FDIC-assisted transaction.

Davis said the Central Coast’s mix of business and consumer banking makes it an attractive market for bankers. “If you look at our balance sheet, you’ll see that we’re predominantly a commercial bank. But we’re also very active on the retail side as far as the deposit mix.”

Umpqua is currently scouting out possible locations on the Central Coast for additional branches, he said. “We’d like to expand here.”

Shares of American Perspective shot up 10.6 percent to close at $9.85 on April 10. Umpqua’s share price dipped 1.1 percent to $12.70.