Central Valley Community Bank to acquire Folsom bank

Fresno’s Central Valley Community Bancorp announced Friday that it is planning a merger with Folsom-based Sierra Vista Bank in a deal worth an estimated $24 million.

The Fresno-based parent of Central Valley Community Bank said it expects the acquisition to close in late 2016, subject to regulatory approval. Both companies’ boards have approved the merger and signed a merger agreement, but the deal still needs to be approved by Sierra Vista Bank’s shareholders.

Sierra Vista Bank, established in 2007, has branches in Folsom and Fair Oaks in Sacramento County, and in Cameron Park in El Dorado County. As of Dec. 31, the bank reported $154.9 million in assets and a loan portfolio with a net value of $112.1 million.

Central Valley Community Bank was founded in 1979 and is financially larger than its merger partner, reporting more than $1.2 billion in assets for the first quarter of 2016. The acquisition of Sierra Vista Bank would expand Central Valley’s footprint in the northern San Joaquin Valley, where it operates branches in Lodi, Tracy and Stockton, and in the Sacramento area.

Based on current financial standing, the combined bank would have about $1.5 billion in assets and 23 branches in the Central Valley from Sacramento to Visalia. “Once completed, the merger will complete another step in our long-term strategy to increase our northern Valley presence, which began 14 years ago in Sacramento County’s Gold Country business community,” said James Ford, Central Valley Community’s president/CEO in a statement announcing the merger.

If Sierra Vista Bank shareholders approve the deal, they could elect to either receive cash, Central Valley Community Bancorp stock, or a combination of the two in exchange for their shares. Based on the current price of Central Valley Community stock, the deal is valued at about $24 million, or $5.22 per share of Sierra Vista stock.

One representative of Sierra Vista would be appointed to the Central Valley Community board as part of the acquisition. “Central Valley Community Bank has grown profitably and sensibly over the past three decades,” Sierra Vista president/CEO Gary Gall said in the merger announcement. “Their quality business reputation, character and leadership are well-known within the financial industry.”

Sierra Vista Bank shares are traded on the OTC Pink over-the-counter board under the symbol SVBA. Its stock price closed Friday at $5 per share, up from Thursday’s close of $4.25 per share.

Central Valley Community Bancorp stock is traded on Nasdaq under the stock symbol CVCY. Shares closed Friday at $12.18 per share, up from Thursday’s closing price of $12.07 per share.

This story was originally published April 29, 2016 at 9:52 AM with the headline "Central Valley Community Bank to acquire Folsom bank."