National Mercantile Bancorp, the holding company for Mercantile National Bank, has agreed to acquire Torrance-based South Bay Bank for $29.1 million in cash, roughly two times book value.

The transaction is expected to take place in the fourth quarter of 2001, subject to regulatory approval, and will double the size of L.A.-based National Mercantile Bancorp, leaving it with assets of close to $400 million.

Scott Montgomery, National Mercantile Bancorp’s chief executive, said South Bay Bank’s senior management, board and the name itself will remain unchanged. “We want them to continue to grow as South Bay Bank,” he said.

While the banks are roughly the same size in terms of asset base, they have focused on different markets in the Los Angeles area. Montgomery says Mercantile makes roughly 80 percent of its loans to small to medium-sized businesses in the entertainment, private banking, health care and non-profit industries. South Bay has focused on commercial real estate and construction lending.

Montgomery expects the consolidation to give both institutions the opportunity to make larger loans to a broader base of customers, in addition to allowing the banks to offer more services such as online banking.