Central Valley Community Bank is merging with another community bank based in Southern California, resulting in a $100 million purchase.
Central Valley Community Bancorp announced the merger on Tuesday.
The big picture: Central Valley Community Bank is merging with Community West Bank, based out of Goleta in Santa Barbara County.
- Currently Central Valley Community Bank operates 20 branches throughout eight counties in the Central Valley and greater Sacramento region. The bank will now add seven branches to its service from Community West Bank along the southern and central coast, ranging from Goleta to Paso Robles.
- The combined company is expected to have around $3.6 billion in total assets.
- Existing Central Valley Community Bancorp shareholders will own around 63 percent of the outstanding shares following the merger, with the rest going to current Community West Bancshares shareholders.
By the numbers: Shareholders of Community West Bancshares, the company that runs Community West Bank, will receive 0.79 shares of Central Valley Community Bancorp common stock for each share of Community West Bancshares common stock.
- While the exchange ratio is fixed, the value of the merger will fluctuate based on Central Valley Community Bancorp’s stock price.
- Based on the closing price on Tuesday, the transaction is valued at $11.15 per Community West Bancshares share, totaling $99.4 million.
- The merged company will have 15 people sit on the board of directors, including nine current directors from Central Valley Community Bancorp and the remaining six from Community West Bancshares.
What we’re watching: Once the merger is completed – which is expected in the second quarter of 2024 – Central Valley Community Bank will assume the name Community West Bank.
- Central Valley Community Bank President and CEO James Kim will lead the merged company as CEO.
- Community West Bank CEO Martin Plourd will serve as President and Director of the merged company.
The backstory: This is the sixth merger for Central Valley Community Bancorp, dating back to its acquisition of the Bank of Madera County in 2005.
- The bank also merged with Service 1st Bank in 2008, Visalia Community Bank in 2013, Sierra Vista Bank in 2016 and Folsom Lake Bank in 2017.
What they’re saying: “The complementary culture, client service model and Central Coast presence of Community West Bank further the opportunity for Company growth in well-recognized Central California communities, creating a combined franchise whose strength and size continue to serve clients and communities with integrity, offering enhanced professional employee development opportunities and greater earning power for shareholders,” Kim said in a statement.