Written by The Business Journal Staff
Continuing an ongoing mergers-and-acquisitions trend involving local banks, Fresno-based Premier Valley Bank has announced plans to merge with Founders Community Bank in San Luis Obispo.
Iowa-based Heartland Financial USA Inc. merged with Premier Valley Bank last year in a $95 million deal, with Premier Valley Bank becoming a subsidiary of Heartland Financial. Now Heartland will acquire Founders Bancorp, parent company of Founders Community Bank, in a 70-percent stock and 30-percent cash transaction valued at about $29.1 million.
As part of the deal, shares of Founders Bancorp will be converted into cash, shares of Heartland common stock or a combination of both, at the election of Founders Bancorp shareholders.
Founders Community Bank’s four banking centers on the Central Coast will continue to operate under the Founders name, while a Premier Valley Bank branch currently under construction in San Luis Obispo will carry the Founders name.
The deal, subject to shareholder and regulatory approvals, is expected to close in the first quarter of 2017, with systems conversion in the spring of 2017.
“We are growing our presence in California and we see the San Luis Obispo County market area as an economically strong and vibrant region,” said J. Mike McGowan, CEO of Premier Valley Bank, in a statement. “As one of the last remaining community banks serving San Luis Obispo County, Founders Community Bank is an excellent fit for our community banking business model. Both banks highly value local market knowledge, excellent customer service and deep roots in the community.”
Founders Community Bank was founded in 2005, and has about $199 million in total assets, $107 million in loans and $180 million in deposits as of Sept. 30. Its banking centers are located in San Luis Obispo, Paso Robles and Morro Bay, with a small business-lending center in Atascadero.
Thomas J. Sherman, president and CEO of Founders Community Bank, stated, “As our board considered our strategic direction in today’s complex banking environment, especially the importance of identifying a potential quality merger partner, Premier Valley Bank, backed by the deep resources of Heartland, stood out as an exceptional opportunity for our customers, employees, community and shareholders. We are pleased to partner with a strong public company with an expanded array of products and services that’s committed to face-to-face customer service and locally-based community banking.”
With the merger’s close, Premier Valley Bank will have nine full-service branches and a loan production office in Central California.
Other local banks announcing merger or acquisition plans in the last year include Valley Business Bank, Citizens Business Bank, Bank of the Sierra, Central Valley Community Bank, Suncrest Bank and Security First Bank.
Suncrest doubles income
Visalia’s Suncrest Bank announced net income of $676,000 for the third quarter, more than double the income for the same quarter last year.
The 129-percent increase comes after the completed $9.4 million acquisition of Sutter Community Bank in Yuba City and after the proposed $18.1 million acquisition of Fresno’s Security First Bank was announced last month.
“The integration of the former Sutter Community Bank has been successfully completed and we look forward to further building our business in the northern Central Valley,” said Ciaran McMullan, president and CEO of Suncrest Bank, in a statement. “The improvement in our efficiency ratio, non-interest expense as a percentage of average assets, and tangible book value per share when compared to the same period last year, just prior to the acquisition, demonstrates how quickly and effectively we have leveraged this merger.”
Total assets for the third quarter were $353.2 million, up 11.5 percent over the second quarter of this year and up 62 percent from the third quarter of 2015.
Valley Business Bank reports income ahead of merger
Valley Commerce Bancorp, holding company of Visalia’s Valley Business Bank, announced third quarter net income of $1.1 million, down slightly from $1.3 million a year ago.
For the first nine months of the year, earnings were $3.2 million, up from $3 million in the same period of 2015.
“I’m very pleased to announce that our company is poised to complete both this year and its 20-year career with a very solid earnings performance. Over the past twelve months, we’ve grown loans by over $20 million and deposits by over $22 million while maintaining a favorable net interest margin. Coming off five consecutive years of record earnings, it is certainly a pleasure to note that our 2016 earnings are ahead of last year’s pace despite economic and regulatory challenges,” Allan W. Stone, president and CEO, said in a statement.
It’s been a busy time for Valley Business Bank, which last month announced a merger agreement with Southern California-based Citizens Business Bank valued at around $70 million for Valley Business Bank shareholders.
“As previously announced, we anticipate that our merger into Citizens Business Bank will be completed early next year,” Stone added. “I believe it will unquestionably be a win for the shareholders of both companies. Valley Business Bank has steadily moved up the ladder of financial performance rankings among community banks and Citizens Business Bank was recently ranked at the top of the industry.”
The bank’s total assets as of Sept. 30 were $429.86 million, up from $401.8 million on Sept. 30, 2015.