Sierra Bancorp, the holding company of Bank of the Sierra, will acquire San Luis Obispo-based Coast Bancorp, pending regulatory approval, the banks announced late Jan. 4.
It’s the latest move in a wave of tri-county banking mergers and industry sources have told the Business Times there are likely more in the works.
“Bank of the Sierra is the appropriate fit to continue the commitment by Coast National Bank for the past 18 years in our communities,” Anita Robinson, president and CEO of Coast Bancorp and Coast National Bank, said in a statement. “Our customers will have access to many more products and services together with the additional benefit of a larger lending limit, enabling us to meet all of the needs of our customers and our community. This transaction benefits our shareholders who have been steadfast during difficult times and rewards them with shares in BSRR, providing opportunity into the future.”
Under the agreement, Coast Bancorp shareholders are entitled to $3.2 million in cash and 581,753 shares of Sierra Bancorp common stock. Based on the Jan. 4 share price of Sierra stock, the transaction would be worth $13.8 million, or $2.37 per Coast Bancorp common share.
“Expansion to California’s Central Coast presents an exciting growth opportunity for Bank of the Sierra,” Bank of the Sierra President and CEO Kevin McPhaill said in a statement.
The boards of the holding companies approved the deal, which still needs approval from regulators and Coast Bancorp shareholders.
Porterville-based Sierra Bancorp has around $1.7 billion in assets, 28 branches and has served the San Joaquin Valley and surrounding region since 1978. It acquired Sierra National Bank in 2000 and Santa Clara Valley Bank in 2014. Sierra’s stock price jumped 48 cents to $17.99 when the market closed on Jan. 5.
Coast National Bank has about $147 million in assets and branches in San Luis Obispo, Arroyo Grande and Paso Robles. It has a loan servicing office in Atascadero. Coast shares increased 65 cents to $2.40.
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