Jan 21, 2014 6:53 PM
Tri Counties Bank has announced this evening its merger with North Valley Bank. The combination creates a banking franchise worth over $3.5 billion in assets and will provide customers with approximately 80 branches throughout California.
The two companies jointly announced they have agreed to combine in a transaction valued at approximately $178.4 million.
According to Tri Counties’ press release, the combined company will have approximately $3.1 billion in deposits and $2.2 billion in gross loans. The combined 80 branches span from Bakersfield to Crescent City.
“This is a winning combination,” said Richard P. Smith, President and CEO of Tri Counties Bank. “Both banks are highly respected for their superior customer service, financial products and strong roots in their communities. Together we are even better.”
Smith went on to state in the press release the merger provides for greater customer service and improved cost efficiencies.
Michael Cushman, President and CEO of North Valley Bank, stated in the same press release the merger is a perfect opportunity for North Valley to unite with a strong competitor to create a superior financial institution.
“We’ll be in a position to compete more effectively in an evolving financial services arena, providing the level of personalized service customers expect,” said Cushman. “The combined company should provide expanded opportunities for our employees and offer expanded resources for our customers.”
Under the terms of the merger agreement, North Valley stockholders will receive a fixed exchange ratio of 0.9433 shares of Tri Counties common stock in exchange for each share of North Valley common stock. In total, North Valley shareholders will own approximately 28.6% of the common stock of the combined company. Based on Tri Counties closing stock price of $27.66 on January 17, the merger consideration is valued at approximately $26.09 per North Valley share. The value of the merger consideration will change based on fluctuations in Tri Counties’ stock price. North Valley option holders will receive cash, net of applicable taxes withheld, for the value of their unexercised stock options as determined prior to closing.
The transaction is expected to be completed by mid-year 2014 but is subject to approval by each company’s shareholders, regulatory approvals, and other customary closing conditions. The agreement has been unanimously approved by the Board of Directors of each company.
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