Personnel Cited in Merger Failure : Anaheim Bank Chairman Blames Non-Financial Issues

El Camino Bank in Anaheim unilaterally withdrew from the planned merger of three Orange County banks because of personnel difficulties and other, non-financial issues, Stanley J. Pawlowski, El Camino’s chairman, said Wednesday.

And the pull-out could scuttle the other half of the deal, a merger of Santa Ana-based National Bank of Southern California and Corporate National Bank, according to Corporate’s founder and president, Gary M. Wrigley.

“Since El Camino decided to pull out, we’ve decided to re-analyze the deal, and we’ll make our decision by the end of the month,” said Wrigley, who added that he did not know about El Camino’s action until he read about it in Wednesday’s edition of The Times.

He said that one of the primary reasons Santa Ana-based Corporate National was willing to participate in the three-way merger was because it included El Camino, a 17-year-old bank with four branches and $105.3 million in assets at the end of last year.

El Camino’s retail customers were touted a month ago as an ideal fit for National Bank and Corporate National, both 4-year-old, single-office banks that cater to business customers.

But National Bank and El Camino “just mutually couldn’t come to agreement on terms and conditions,” said William H. Jacoby, chairman of National Bank and president of its holding company, California Commercial Bankshares. “Not every deal works.”

The letter of intent that began the merger was signed a month ago when only the barest of details had been worked out, Jacoby said. “We really hadn’t negotiated a lot of things.”

He and Pawlowski said Wednesday that it simply became evident that they could not reach a definitive agreement and that it was better to call off the merger than to continue trying to fashion one. They said they parted on friendly terms.

Pawlowski would not discuss all the problems, but he did say that placing top management in the new bank was one of the major stumbling blocks.

“We feel we’ve got a good management team, and we feel we have a good middle management team,” he said. “We felt we should have been able to maintain that going in.

“But there had to be some changes, and I didn’t like some of the changes coming about. Some of our people probably would have been moved around into other positions, and maybe we could have kept all of them. But they might not have liked those positions and left.”

Pawlowski said there other issues that made him doubt that the merger was in the best interests of El Camino’s shareholders, but he declined to be specific.

Jacoby had instigated the merger talks after all three bankers attended a seminar last fall to learn ways that small, independent banks could compete more effectively against bigger banks or band together to make themselves more attractive as potential merger partners for major East Coast banks, which will be allowed to purchase California banks in 1991.

Pawlowski said the financial package proposed by Jacoby “was certainly very good.” El Camino shareholders would have received about $7 million in cash and the rest in preferred notes and common stock, which would have given them about 17% of the combined bank.