Americas United Bank (AUNB) has signed a definitive agreement and plan of merger to merge its operations into Bank of Southern California (BCAL).

Under the terms of the agreement, AUNB shareholders will receive $7 in cash and 0.4746 shares of BCAL common stock representing a total of $14 per share for each share of AUNB common stock.

The transaction is valued nearly $44.1m.

It is expected to be immediately accretive to BCAL’s earnings per share in this year excluding transaction costs.

The merger will see the combination of two Southern California franchises with pro forma assets of nearly $750m.

Headquartered in San Diego, Bank of Southern California operates eight locations while Americas United Bank is headquartered in Glendale and has four branches.

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The combination is also expected to enable BCAL to enter into the Los Angeles market as a part of its expansion strategy in the Southern California region.

Bank of Southern California president and CEO Nathan Rogge said: “The combined bank offers a highly attractive franchise for us in the very desirable Los Angeles market and furthers Bank of Southern California’s vision of expanding our market share in Southern California.

“Americas United Bank is a well-managed community business bank with a strong relationship banking culture, making it a great fit for us.

“Bank of Southern California recently expanded into Orange County in December 2017, so this opportunity allows us to continue to execute the next natural extension of our planned growth.”

The merger, subject to customary closing conditions including regulatory and shareholder approvals, is expected to close in the third quarter of this year.