Southern California Bancorp has agreed to acquire California’s Bank of Santa Clarita in a stock deal worth around $56.2m.
Transaction details
The deal will see Bank of Santa Clarita merging with and into Bank of Southern California, a subsidiary of Southern California Bancorp.
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The merged entity will have around $2bn in assets, $1.5bn in deposits and $1.5bn in net loans upon deal completion in the third quarter of 2021.
Bank of Santa Clarita shareholders will get 1.00 share of Southern California Bancorp common stock for each share held.
Current shareholders of Southern California Bancorp will own around 78% of the merged business while Bank of Santa Clarita shareholders will own around 22%.
As part of the deal, Bank of Santa Clarita chairman and CEO Frank Di Tomaso will become a member of the boards of Southern California Bancorp and Bank of Southern California.
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By GlobalDataThe deal is pending shareholder and regulatory approvals.
Founded in 2001, Bank of Southern California has branches in San Diego County, Los Angeles County, Orange County, San Bernardino County, and the Coachella Valley in Riverside County.
Southern California president and CEO Nathan Rogge said that the deal supports the firm’s long-term growth plan.
Rogge noted: “The cultures, values and relationship-based banking models of these two banks are in close alignment and we are very pleased to have the Bank of Santa Clarita team and their customers join the Bank of Southern California family.
“We have recently added several experienced bankers in the northern area of our footprint, and this expansion will support those teams, as well as increase the Bank’s lending limit. Using reasonable transaction assumptions, and after conducting detailed due diligence, we expect an earn back on the acquisition of less than one year, with earnings modestly accretive this year and in the high single digits in 2022, the first full year of our combined operations.”
M&A activities in the US community banking space have been rampant so far this year.
Among these were Independent Bank’s agreement to buy Meridian Bancorp for $1.15bn and New York Community Bancorp’s $2.6bn deal to acquire Flagstar Bancorp.
Another recent notable deal is Enterprise Financial Services’ agreement to acquire First Choice Bancorp for $397.7m.
