Santa Clara Valley Bank to be sold in $15.3M deal
Santa Paula-based Santa Clara Valley Bank is being acquired by Sierra Bancorp for $15.3 million in an all-cash deal announced July 17.
The Ventura County bank operates branches in Fillmore, Santa Paula and Valencia. With assets of about $127 million, the bank is the second-smallest bank headquartered in the Tri-Counties.
Porterville-based Sierra Bancorp is the $1.5 billion parent company of Bank of the Sierra. The firm noted the strength of Ventura County’s agriculture sector and the proximity of the Santa Clara Valley to its primary market, the Southern San Joaquin Valley, as features that made the deal attractive.
“The market is very similar to the region we already serve, and this opportunity is a natural extension for us,” Sierra Bancorp CEO James Holly said in a statement. “In addition, beyond the Santa Clara Valley, we believe that we can serve the commercial and residential communities of Ventura, Oxnard and Santa Clarita.”
The acquisition, which has been approved by the boards of both banks, includes $12.3 million in cash, or $6 per share, to common shareholders, and $3 million to preferred shareholders to retire outstanding preferred stock and warrants.
The deal still needs shareholder and regulatory approval.
Sierra Bancorp has 25 branches in California and operates real estate and agricultural lending centers in the state, as well as a Small Business Administration loan center in the Central California region.
“Bank of Sierra is large enough to offer a wide variety of products and services, but small enough to remain a community bank dedicated to serving its customers and communities,” Santa Clara Valley Bank President and CEO Cheryl Knight said in a statement. “This transaction should also preserve many local jobs.”
The proposed purchase price represents 109 percent of Santa Clara Valley Bank’s book value as of March 31, Sierra said. Santa Clara Valley Bank shares, traded over the counter, closed at $4.72 on July 17 before the deal was announced. The bank’s shares shot up to $5.70, a 20.8 percent surge, in midday trading on Friday.
The deal “not only provides high value to the shareholders, it also ensures a high quality community bank is here to support our customers,” Santa Clara Valley Bank Chairman Leslie Cornejo said in a statement.
Santa Clara Valley Bank lost $153,000 in 2013 after turning a $558,000 profit in 2012. The company has 38 full-time equivalent employees, according to its regulatory filings.
Sierra said it expects the deal to be immediately accretive to its earnings and that it will yield an internal rate of return of more than 20 percent.[wikichart align=”center” ticker=”OTCBB:SCVE” showannotations=”true” livequote=”true” startdate=”18-01-2014″ enddate=”18-07-2014″ width=”580″ height=”300″]