Suncrest Bank wraps up its purchase of the Valley’s smallest locally owned bank

There is one less Valley-owned bank heading into 2017, as Suncrest Bank of Visalia has completed its acquisition of Fresno-based Security First Bank on Monday.

The two banks announced in early September that they had agreed for Suncrest to buy Security First Bank in a cash-and-stock deal valued at about $18.1 million.

Suncrest president/CEO Ciaran McMullan will continue in the same position, while former Security First president/CEO Steve Jones will become Suncrest’s chief operating officer, and Security First board vice chairman Eric Wilkins will join the Suncrest board of directors.

Suncrest operates branches in Visalia, Porterville, Kingsburg and Yuba City and opened a small business office in Fresno this year. Security First Bank operated a single office in Fresno that is now a Suncrest office. Jeannette Williams, Suncrest Bank’s Fresno market president, heads what were Security First’s operations in Fresno.

Several Security First directors will serve as members of an advisory board for the Fresno market.

Both banks’ shareholders approved the deal, and banking regulators gave a green light to the acquisition in November.

Suncrest, established in mid-2008 and reporting assets of about $353 million as of Sept. 30, was the sixth-largest of nine banks or bank holding companies headquartered in the central San Joaquin Valley. Security First Bank was established in early 2007 and was the smallest of the Valley banks with assets of almost $104 million. Their combined assets of about $457 million vault Suncrest into the fifth-ranked position of eight Valley banks.

This is the second acquisition in just over a year for Suncrest. In December 2015, Suncrest completed its purchase of Sutter Community Bank in Yuba City in an all-stock deal valued at about $9.4 million. Together, the Sutter and Security First mergers have effectively doubled the value of Suncrest’s assets.

“We set ourselves the ambitious goal of growing to $500 million in total assets within five years, and with the completion of this deal we have effectively achieved that target, two years ahead of schedule,” said McMullan, who joined Suncrest in 2013.

The deal came after a prior proposed acquisition of Security First, by SunPac Financial of Los Angeles, was terminated in June. That deal, announced in the first half of 2015, collapsed after it had been extended several times.

Security First’s Jones said then that the termination was largely the result of SunPac’s inability to raise the capital needed to complete the acquisition, along with changes in SunPac’s management and leadership.

Also on Monday, Suncrest announced that it had completed the sale of almost 690,000 shares of stock to Castle Creek Capital Partners VI, a limited partnership that is an investment fund for a company in San Diego County.

That sale raised $5.6 million, which McMullan said earlier this year would be used to support future growth of the company. About 170,000 more shares were sold to two of the bank’s directors for a total of about $1.4 million.

Suncrest Bank’s stock is traded on the OTCQX over-the-counter board under the stock symbol SBKK. The company’s shares had traded as low as $7.28 per share in September, but on Monday remained unchanged from Friday’s closing price of $11.00 a share – a high-water mark for the stock price since Sept. 1 and equaling the all-time high closing price attained briefly in September 2010.

Security First Bank’s stock was traded on the OTC-Pink board under the stock symbol SFRK. On its final day of trading, the stock closed at $9.92 per share.

This story was originally published December 19, 2016 at 12:44 PM with the headline "Suncrest Bank wraps up its purchase of the Valley’s smallest locally owned bank."