CVB Financial has agreed to purchase Suncrest Bank in a stock and cash transaction valued at approximately $204m.
As per the terms of the agreement, Suncrest will merge with and into CVB Financial’s Citizens Business Bank, which will then have approximately $17bn in assets on a pro forma basis.
At the closing of the deal, Suncrest common stock shareholders will receive 0.6970 shares of CVB Financial common stock and $2.69 per share in cash for each share held.
CVB Financial will pay aggregate consideration of approximately 8.5 million shares of its common stock and $39m in cash.
Domiciled in California, the acquired firm had approximately $1.3bn in assets, $0.9bn in gross loans and $1.2bn in total deposits as of 31 March 2021.
The acquisition, which is CVB Financial’s second-largest, is expected to bolster Citizens Business Bank’s presence in central California and Sacramento by adding scale and market share.
Additionally, CVB Financial expects the merger to result in approximately 3.5% earnings per share accretion in 2023.
CVB Financial and Citizens Business Bank CEO David Brager said: “On behalf of all of us at Citizens Business Bank, I want to welcome Suncrest Bank’s talented employees and loyal customers. We look forward to a swift closing and smooth integration.”
Suncrest Bank president and CEO Ciaran McMullan said: “Citizens Business Bank is one of the top-performing banks in the country and this combination rewards our shareholders, creates opportunities for our employees and expands the resources available to our customers.”
The proposed merger has been approved by the boards of directors of Suncrest Bank, CVB Financial and Citizens Business Bank.
The deal is expected to close by the fourth quarter of 2021 or the first quarter of 2022, subject to regulatory approval and other closing conditions.