TriCo Bancshares has signed a definitive agreement to acquire Valley Republic Bank’s parent company Valley Republic Bancorp for $165.6m.
As agreed, Valley Republic Bank will merge with and into TriCo’s Tri Counties Bank. The combined lender will have more than $9bn in assets.
Under the all-stock transaction, Valley shareholders will receive 0.95 of a share of TriCo’s common stock for each share.
Separately, TriCo Bancshares will also pay $0.9m in cash to Valley option holders.
The deal is expected to close in the fourth quarter of 2021, subject to Valley shareholders’ approval and regulatory nods.
Once approved, Valley’s shareholders will own around 12% of the combined company.
Establsihed in 2009, Valley Republic Bank offers banking services to businesses, individuals and non-profit organisations.
The lender has three full-service banking offices in Bakersfield and one in Delano. It also has a loan production office in Fresno.
The deal will make Tri Counties Bank the largest community bank in Bakersfield and Kern County by deposits.
Additionally, it is expected to be 5.5% accretive to TriCo’s earnings per share next year.
On the other hand, the combination will provide Valley Republic Bank customers with access to a wider array of services.
Valley president and CEO Geraud Smith said: “We are delighted to join a bank that shares our cultural values, commitment to its customers, and has a local community banking focus.
“Valley has built a leading franchise in its communities, and this partnership will provide our clients with the full breadth of Tri Counties Bank’s comprehensive set of products and services.
“I look forward to my continuing leadership role in the combined organisation and this next chapter for Valley as part of the TriCo franchise.”
Established in 1975, Tri Counties Bank provides personal, small business and commercial banking services. In 2018, the lender’s parent company acquired FNB Bancorp in a transaction valued at $315.3m.