TriCo Bancshares (TriCo), the parent company of Tri Counties Bank, has signed a definitive agreement to acquire FNB Bancorp, the parent company of First National Bank of Northern California (FNB NorCal) in an all-stock transaction valued nearly $315.3m.

The acquisition is expected to strengthen Tri Counties Bank’s presence throughout Northern California into the San Francisco peninsula enabling it to serve the customers located in the Bay Area.

The combined company will have 78 branches throughout California with asset strength of nearly $6.1bn, $5bn in deposits and $3.7bn in gross loans.

TriCo president and CEO Richard Smith said: “We admire FNB NorCal’s over 50 year commitment to the Bay Area and believe they are the ideal partner to enable us to enter the market.

“We strongly believe that the Bay Area will benefit from our full service community banking approach that combines contemporary products and services with personal service and community engagement.”

Under the terms of the agreement, FNB shareholders will receive 0.980 shares of TriCo common stock for each share of FNB common stock, subject to a trading collar.

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After completion of the transaction, FNB shareholders will hold nearly 24% of the common stock of the combined company.

Two FNB directors will also join TriCo’s Board of Directors following the completion of the deal.

The deal is subject to shareholder approval of both the companies as well as federal and California banking regulatory agencies consent.

TriCo expects that the transaction would be 2% accretive to earnings in the next year (excluding transaction costs) and 8% accretive to earnings in 2019.