Sierra Bancorp Announces Agreement to Acquire Santa Clara Valley Bank, N.A. of Santa Paula
Sierra Bancorp (NASDAQ: BSRR), the holding company of Bank of the Sierra, announced the signing of a definitive agreement to acquire Santa Clara Valley Bank, N.A. (OTC: SCVE) of Santa Paula, California for aggregate cash consideration of $15.3 million.
The consideration consists of $12.3 million or $6.00 per share to common shareholders and cash consideration of $3.0 million to preferred shareholders to retire outstanding preferred stock and associated warrants. Included in the $12.3 million consideration, Sierra will pay $700,000 to cash out existing in-the-money warrants.
James C. Holly, Chief Executive Officer of Sierra Bancorp, commented, “This is an exciting opportunity for Bank of the Sierra. The Santa Clara Valley is a strong agricultural region in close proximity to our primary market, the Southern San Joaquin Valley. The market is very similar to the region we already serve and this opportunity is a natural extension for us. In addition beyond the Santa Clara Valley, we believe that we can serve the commercial and residential communities of Ventura, Oxnard and Santa Clarita” Mr. Holly added, “We look forward to welcoming Santa Clara Valley Bank’s customers and employees to Bank of the Sierra.”
The consideration per share represents approximately 109% of Santa Clara Valley Bank’s tangible book value as of March 31, 2014. Sierra Bancorp expects the acquisition to be immediately accretive to earnings per share, and will yield a tangible book value earnback of less than 3.5 years and an IRR in excess of 20%.
Kevin J. McPhaill, President and Chief Operating Officer of Sierra Bancorp, said, “This transaction is positive for our shareholders. The cash consideration allows us to leverage our existing capital and we believe this opportunity will enable us to further deploy our capital via lending opportunities in the Santa Clara Valley and the surrounding communities.
Leslie Cornejo, Chair of Santa Clara Valley Bank, expressed her support for the transaction, commenting that, “it not only provides high value to the shareholders, it also ensures a high quality community bank is here to support our customers.” President and CEO Cheryl L. Knight added that “Bank of Sierra shares a common corporate and customer service culture with Santa Clara Valley Bank; our customers should expect to receive the same excellent and personal service to which they are accustomed.” She explained that, “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. This transaction should also preserve many local jobs.”
The boards of Sierra Bancorp and Santa Clara Valley Bank unanimously approved the transaction, which is subject to customary conditions of closing including required regulatory approvals and approval by the shareholders of Santa Clara Valley Bank. At June 30, 2014, Sierra Bancorp had approximately $1.5 billion in assets and twenty five branch offices, an online branch, a real estate industries center, an agricultural credit center, and an SBA center in the Central California region.
Valley. As of March 31, 2014, Santa Clara Valley Bank, N.A. operated three branches in addition to its headquarters in Santa Paula and had approximately $127 million in assets, $63 million in gross loans, $105 million in deposits, and $11 million in total common equity.
About Sierra Bancorp
Sierra Bancorp (NASDAQ: BSRR) is a publicly-traded company with approximately $1.5 billion in assets headquartered in Porterville, California that operates primarily through Bank of the Sierra (the Bank). The Bank is a multi-community financial institution that offers a full range of retail and commercial banking services, primarily in the central and southern sections of the San Joaquin Valley. Sierra Bancorp specializes in agricultural lending and works with many of the businesses in that region. Since opening for business in January 1978, the Company has grown to be the largest independent bank headquartered in the South San Joaquin Valley. More information about Sierra Bancorp can be found on its website at www.sierrabancorp.com and more information about Bank of the Sierra can be found on its website at www.bankofthesierra.com.