Suncrest Bank expands to the capital
Visalia-based bank acquires Community Business Bank in Sacramento for $62 million
VISALIA – Suncrest Bank announced last week that it acquired Community Business Bank in a deal worth $62.5 million. On Nov. 7, the Visalia-based Suncrest Bank announced the merger with CBBC Bancorp, the parent company of Community Business Bank based in West Sacramento, subject to customary closing conditions, including the receipt of all regulatory approvals and the approval of the shareholders of CBBC and Suncrest. The deal is expected to close in the second quarter of 2018.
In addition, Suncrest also announced a fully subscribed $25 million capital raise of Suncrest common stock at $10.50 per share, subject to customary closing conditions, with the proceeds being used both to support the merger and for future organic growth. The fully subscribed offering was led by Castle Creek Capital Partners VI, L.P.
Suncrest President and CEO, Mr. Ciaran McMullan will continue as President and CEO of the combined bank. CBBC CEO, Mr. John A. DiMichele and CBBC President, Mr. Chad Meyer, will join the Board of the combined bank as non-executive directors. Following completion of the merger, the CBBC branches in West Sacramento and Lodi will continue to operate under the Community Business Bank name, as a division of Suncrest Bank.
“I am very pleased with our decision to enter into this strategic partnership with Suncrest Bank. The combination of our two strong community banks will not only benefit our customers but also have a positive impact on our staff and communities, while rewarding our shareholders for the Bank’s excellent performance,” said John A. DiMichele, Chief Executive Officer of CBBC. “I strongly believe we have found a partner in Suncrest, with the right merger experience, to ensure the process of integrating our two great banks will go as smoothly and efficiently as possible for both our staff and our customers.”
“This is a truly transformational deal for Suncrest, with the potential to double our assets and double our market capitalization while significantly improving our earnings power,” said Ciaran McMullan, President and CEO of Suncrest Bank. “The completion of this transaction will make Suncrest a formidable competitor in the Central Valley banking marketplace, and positions us for continued profitable growth in key markets such as the Greater Sacramento area and the South Valley.”
The transaction is valued at approximately $62.5 million, based on a per share valuation of Suncrest’s stock of $10.50 and includes the cash out of CBBC in-the-money options for the 12 months ending Sept. 30, 2017. The pro forma company will have 12.26 million shares issued and outstanding, representing a prospective market capitalization of approximately $129 million based on a per share valuation of Suncrest’s stock of $10.50 or $142 million based on Suncrest’s stock price of $11.59 as of November 6, 2017, with the potential for significantly increased liquidity. Total pro forma assets at deal close are expected to be approximately $900 million. Suncrest Bank trades under the ticker symbol SBKK on the over-the-county stock exchange (OTCQX).
CBBC is headquartered in West Sacramento, Calif., with $325 million in assets and two branches located in West Sacramento and Lodi, Calif. and a Loan Production Office in Roseville, Calif. The Bank has received the following organizations’ highest ratings of recognition: Bauer Financial, Bankrate, Weiss Rating, DDF, CB Top 10 and The Findely Reports. More information can be found at www.communitybizbank.com.
Suncrest is headquartered in Visalia, Ca., with $529 million in assets and five branches located in Fresno, Kingsburg, Porterville, Visalia and Yuba City. The merger combines two profitable and growing franchises; CBBC has consistently delivered strong earnings performance while Suncrest’s improving profitability has been supported by its low cost of funds and strong growth in core deposits. CBBC and Suncrest have annualized year-to-date loan growth of 20% and 17%, respectively. It is regularly rated Five Stars by Bauer Financial as one of the nation’s strongest financial institutions, and in 2017 was named to the 2017 OTCQX® Best 50, a ranking of top performing companies traded on the OTCQX Best Market. It is a Preferred Lender with the Small Business Administration and its stock can be purchased on the open market, trading on the OTCQX under the ticker symbol SBKK. For all other information, visit www.suncrestbank.com.