Central Valley Community acquires Folsom Lake Bank
Staff Writer |
Central Valley Community Bancorp, together with its wholly owned subsidiary, Central Valley Community Bank, a bank holding company headquartered in Fresno, Ca., and Folsom Lake Bank, headquartered in Folsom, Ca., jointly announced that a definitive merger agreement has been signed by both parties.
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Under the terms of the agreement, Folsom Lake Bank, with three full-service branches located in Folsom, Rancho Cordova, and Roseville, will merge with Central Valley Community Bank.
The transaction is subject to customary closing conditions, including regulatory approvals and Folsom Lake Bank shareholder approval.
The Central Valley Community Bancorp and Folsom Lake Bank Boards of Directors have unanimously approved the transaction, which is expected to close in the fourth quarter of 2017.
As more fully described in the definitive merger agreement, and the investor presentation which is attached, Central Valley Community Bancorp will acquire Folsom Lake Bank in a stock merger in which the Folsom Lake Bank shareholders will be entitled to receive 0.80 shares of Central Valley Community Bancorp stock per Folsom Lake Bank share.
Central Valley Community Bancorp will assume the stock option plan and outstanding stock options of Folsom Lake Bank as part of the transaction. Based on the closing price of Central Valley Community Bancorp on April 27, 2017, the fully diluted transaction consideration is $33.6 million, or $18.74 per Folsom Lake Bank common share.
However, the deal value will fluctuate with changes in Central Valley Community Bancorp's stock price through the closing date.
Central Valley Community Bancorp expects the transaction will be 1.8% dilutive to tangible book value per share initially resulting in tangible book value earnback of less than 2.5 years, 3% accretive to earnings per share in 2018 and an IRR greater than 15%.
As of March 31, 2017, on a pro forma consolidated basis with Folsom Lake Bank, Central Valley Community Bancorp would have had approximately $1.7 billion in total assets.
Existing Central Valley Community Bancorp shareholders will own approximately 90.5% of the outstanding shares following the merger and Folsom Lake Bank shareholders are expected to own approximately 9.5%. ■
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