Two of Valley’s fastest growing banks merge

Citizens Business Bank and Suncrest Bank announce $204 million merger expanding both to 60 locations in Central, Sacramento valleys and Southern California

VISALIA – Two of the fastest growing banks in the area have merged to hold a significant share of the Valley market.

On July 27, Ontario-based CVB Financial Corp., the parent company for Citizens Business Bank, and Visalia-based Suncrest Bank announced the deal worth approximately $204 million or $16.18 per Suncrest share, based on CVB Financial Corp.’s closing stock price of $19.36 on July 26, 2021. Citizens Business Bank has a location in Visalia and Tulare with a total of 50 banking locations and three offices throughout the Valley and Southern California. Suncrest Bank has seven locations in the Valley and Sacramento area, including Visalia and Porterville.

The boards of directors of Suncrest, CVB Financial Corp. have unanimously approved the deal. The merger is anticipated to close in the fourth quarter of 2021 or first quarter of 2022, pending regulatory approvals, satisfaction of certain closing conditions and the approval of Suncrest shareholders. Upon completion of the merger, Suncrest’s operations will be combined with Citizens Business Bank. No timeline was given on when Suncrest locations would be renamed as Citizens banks.

Suncrest CEO Ciaran McMullan said the merger would broaden the range of services for Suncrest customers, including a larger network of ATMs, private and corporate banking, international banking, as well as trust services.

“By joining forces with Citizens Business Bank, we feel confident that we are not only staying true to this goal but building on it significantly by ensuring our customers have access to a wider range of financial tools to help them attain their goals,” McMullan said in a letter to customers.

The merger will increase Citizens’ total assets to approximately $17 billion on a pro forma basis based on the most recent publicly available information for Suncrest and CVB Financial Corp. Citizens CEO David Brager said the acquisition was the second largest in CVB Financial’s history and would deliver important benefits to the combined customers. He said the increased presence in the Valley and expansion into Sacramento, should bring significant growth opportunities for both banks.

“On behalf of all of us at Citizens Business Bank, I want to welcome Suncrest Bank’s talented employees and loyal customers,” Brager said. “We look forward to a swift closing and smooth integration.”

CVB Financial Corp. expects the merger to result in an approximately 3.5% earnings per share increase in 2023, excluding one-time transaction costs and assuming full realization of cost savings with an internal rate of return of approximately 20%.

Suncrest Bank, headquartered in Visalia, California, had approximately $1.3 billion in total assets, $0.9 billion in gross loans and $1.2 billion in total deposits as of March 31, 2021. Suncrest has seven branch locations and two loan production offices throughout California’s Central Valley.

According to the Business Journal, Citizens Business Bank had a 2.83% market share in Fresno, Kings, Madera and Tulare counties while Suncrest had a 2.71% market share.

Combined, the new bank’s market share would be 5.54%, just behind Porterville-based Bank of the Sierra (6.13% share) and just above Fresno-based Central Valley Community Bank (4.44% share), ranked Nos. 6 and 7 in the Valley, respectively.

Pursuant to the Agreement, at closing each share of common stock at Suncrest, which trades under the ticker symbol SBKK on the over-the-counter stock exchange (OTCQX), will receive consideration consisting of 0.6970 shares of CVB Financial Corp. common stock and $2.69 per share in cash.

“I couldn’t be more proud of the Suncrest team and what we have achieved together,” McMullan said. “This merger is a testament to the hard work of our employees in providing exceptional products and services to our customers.”

CVB Financial Corp., which trades under the ticker symbol CVBF on the Nasdaq, will pay aggregate consideration of approximately 8.5 million shares of CVB Financial Corp. common stock and $39.0 million in cash, subject to purchase price adjustment provisions and other terms set forth in the Agreement. Giving effect to the merger, Suncrest shareholders would hold, in aggregate, approximately 6% of CVB Financial Corp.’s outstanding common stock following the merger. Suncrest stock options that are in-the-money at the time of closing will receive cash consideration based on the difference between the per share merger consideration and their strike price.

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