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Mechanics Bank, based in Walnut Creek, California, has been around since 1905—but last year it got a lot bigger. In September 2019, it acquired Rabobank N.A., growing from 44 branches to 144 in the process. While it’s unusual for smaller banks to acquire larger ones, the $2.1 billion merger not only added Rabobank’s one hundred locations to the combined company, but increased Mechanics Bank’s assets from about $6 billion to more than $17 billion.
The merger better equipped the bank to make large loans and take on large customers, while still prioritizing customer service, company spokesman Greg Jones told the Sacramento Business Journal last fall. “We are filling in the void between the large national banks and community banks,” he said.
Now the fifth-largest bank in the Golden State, the company has vowed to maintain its commitment to its customers and communities.
“We believe this strategic combination of two highly complementary franchises will unlock significant value for our shareholders, clients, employees, and the many communities served by the new Mechanics Bank,” Carl Webb, chairman of the board of Mechanics Bank, said in a September 2019 statement. “We are pleased to have closed such a major transaction less than six months since announcing our acquisition plans, and we now look forward to putting the tremendous resources of this unique financial institution to work for all of our constituents.”
Although the merger expanded the horizons of the 115-year-old company, it also provided its share of challenges. A well-prepared legal team is key to a successful transition, and Letty Anguiano, vice president and associate general counsel for Mechanics Bank, tells Hispanic Executive that the acquisition has involved some changes for her department. In the past, she says, her team has been made up of generalists, with everyone doing a little of everything. Now that they’ve gone from two lawyers plus a general counsel to six lawyers and a GC, they’re shifting gears to target more specific roles.
Mechanics Bank also operates CRB Auto, a lender that purchases auto contracts from franchises and independent vehicle dealerships in fourteen states. John DeCero, the CEO of Mechanics Bank, told the Orange County Business Journal in 2019 that despite difficulty in the car-lending industry, CRB performed well with declining delinquencies in its accounts. That kind of performance was instrumental in helping Mechanics complete its merger.
“We hope to do a lot more business in Orange County,” he told the newspaper. “We’ll have more capacity and our capital is going up significantly.”
With those kinds of prospects and a shift to specialization from a company that’s already proven its ability to expand exponentially, the future looks bright for Mechanics Bank.
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