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TriCo Bancshares to Expand in Merger with Valley Republic Bancorp

July 28, 2021, 07:00 AM
Filed Under: Banking News

TriCo Bancshares, the parent company for Tri Counties Bank, and Valley Republic Bancorp, the parent company for Valley Republic Bank, have entered into a definitive agreement under which Valley will merge with and into TriCo in a stock transaction valued at approximately $165.6 million.

The strategic combination will bring together two service-focused community banks that share a deep commitment to the customers and communities they serve. When completed, the transaction will make Tri Counties Bank the largest community bank in Bakersfield and Kern County by deposits, and the combined company will have more than $9 billion in assets, $8 billion in deposits, and nearly $6 billion in loans, serving business and consumer customers with locations throughout California.

Rick Smith, TriCo’s Chairman, President and Chief Executive Officer, commented, “We have great respect for the Valley franchise, its history of successful growth, and its long-term commitment to its customers and local community. Geraud and the Valley team have achieved unparalleled growth in the Bakersfield market, and we look forward to joining together to grow Tri Counties Bank into the leading community bank throughout the San Joaquin Valley. We have a proven track record of successful acquisitions, having most recently completed the integration of FNB Bancorp in 2018. We’re excited to welcome Valley employees and customers and we are prepared to work together for a smooth transition process.”

Geraud Smith, Valley’s President and Chief Executive Officer, added, “We are delighted to join a bank that shares our cultural values, commitment to its customers, and has a local community banking focus. Valley has built a leading franchise in its communities, and this partnership will provide our clients with the full breadth of Tri Counties Bank’s comprehensive set of products and services. I look forward to my continuing leadership role in the combined organization and this next chapter for Valley as part of the TriCo franchise.”

Key elements of the proposed combination include:

  • By joining forces with Valley Republic Bank, Tri Counties Bank will become the premier community bank in Bakersfield and the San Joaquin Valley.
  • Tri Counties Bank, through its unique brand of Service With Solutions, will maintain and extend Valley Republic Bank’s legacy of outstanding service to its customers and community. Tri Counties Bank was recently named one of America’s Best-In-State Banks by Forbes Magazine.
  • Both banks share a strong commitment to support the communities in which they operate.
  • Tri Counties Bank’s larger size and product set will provide current Valley Republic Bank customers with a wider array of financial solutions.

The agreement was unanimously approved by the Board of Directors of each company and provides for one director of Valley to join TriCo’s Board of Directors. Upon the close of the transaction, Valley’s shareholders will own approximately 12 percent of the combined company. The transaction is expected to close in the fourth quarter of 2021, contingent upon approval from Valley’s shareholders, along with other customary regulatory approvals.

TriCo was advised in this transaction by Keefe, Bruyette & Woods, A Stifel Company as financial advisor and Sheppard, Mullin, Richter & Hampton LLP as legal counsel. Valley was advised by Stephens, Inc. as financial advisor and Duane Morris LLP as legal counsel.

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