TriCo Bancshares (NASDAQ: TCBK, “TriCo”), the parent company for
Tri Counties Bank, and Valley Republic Bancorp (OTCQX: VLLX,
“Valley”), the parent company for Valley Republic Bank, today
announced they 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, or $38.15 per share, based on
TriCo’s stock price of $40.16 on July 26, 2021.
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.
Under the terms of the agreement, Valley shareholders will
receive 0.95 of a share of TriCo’s common stock in exchange for
each share of Valley’s common stock, subject to certain potential
adjustments. The aggregate merger consideration of $165.6 million
includes $164.7 million in TriCo stock to be issued to Valley
shareholders and $0.9 million to be paid in cash to Valley option
holders. The value of the merger consideration will fluctuate until
closing based on the value of TriCo’s stock. The merger is expected
to qualify as a tax-free reorganization.
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% 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.
The transaction is expected to be 5.5% accretive to TriCo’s
earnings per share in 2022, with 1.6% dilution to tangible book
value per share, and a tangible book value earnback of 2.0 years.
The earnings per share accretion estimates are based on anticipated
cost savings of approximately 17% of Valley’s non-interest expense
and does not include any benefits from potential revenue synergies
which may result, although opportunities have been identified.
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.
Investor Presentation
An investor presentation has also been created for this
announcement and can be accessed at TriCo’s and Valley’s respective
websites:
- TriCo: https://www.tcbk.com/investor-relations
- Valley: https://www.valleyrepublic.bank/investor-relations
About TriCo Bancshares
Established in 1975, Tri Counties Bank is a wholly-owned
subsidiary of TriCo Bancshares (NASDAQ: TCBK) headquartered in
Chico, California, with assets of over $8 billion and over forty
five-years of financial success and stability. Tri Counties Bank
provides a unique brand of Service With Solutions® for communities
throughout California with a breadth of personal, small business
and commercial banking services and easy access to it with all an
extensive branch network, more than 32,000 surcharge-free ATMs
nationwide, and advanced online and mobile banking.
About Valley Republic Bancorp
Valley Republic Bancorp is a bank holding company formed in
2016. Valley Republic Bank is a wholly-owned subsidiary of Valley
Republic Bancorp, headquartered in Bakersfield, California. Valley
Republic Bank is in its twelfth year of operation, having been
established in 2009. Valley Republic Bank is a full-service,
community bank with three full-service banking offices in
Bakersfield, one full-service banking office in Delano, and a loan
production office in Fresno. Valley Republic Bank emphasizes
professional, high quality banking services provided to a wide
range of businesses and professionals. Valley also provides a full
complement of banking services that are available to individuals
and non-profit organizations.
Forward-Looking Statements
Certain statements contained in this investor presentation may
be considered forward-looking statements regarding TriCo Bancshares
(“TCBK” or “TriCo”), including its wholly-owned subsidiary Tri
Counties Bank, Valley Republic Bancorp (“VLLX” or “Valley”),
including its wholly-owned subsidiary Valley Republic Bank, and
TriCo’s proposed acquisition of Valley. These forward-looking
statements may include: statements regarding the acquisition, the
consideration payable in connection with the acquisition, and the
ability of the parties to consummate the acquisition.
Forward-looking statements are typically identified by words such
as “believe,” “expect,” “anticipate,” “intend,” “outlook,”
“estimate,” “forecast,” “project,” “pro forma” and other similar
words and expressions. Forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over
time. Forward-looking statements speak only as of the date they are
made. Because forward-looking statements are subject to assumptions
and uncertainties, actual results or future events could differ,
possibly materially, from those that TriCo or Valley anticipated in
its forward-looking statements and future results could differ
materially from historical performance. Factors that could cause or
contribute to such differences include, but are not limited to, the
possibility: that expected benefits of the acquisition may not
materialize in the timeframe expected or at all, or may be more
costly to achieve; that the acquisition may not be timely
completed, if at all; the occurrence of any event, change or other
circumstances that could give rise to the right of one or both of
the parties to terminate the definitive transaction agreement; the
outcome of any legal proceedings that may be instituted against
TriCo or Valley; that prior to the completion of the acquisition or
thereafter, TriCo’s and Valley’s respective businesses may not
perform as expected due to transaction-related uncertainty or other
factors; that the parties are unable to successfully implement
integration strategies; that required regulatory, Valley
shareholder or other approvals are not obtained or other closing
conditions are not satisfied in a timely manner or at all; adverse
regulatory conditions may be imposed in connection with regulatory
approvals of the acquisition; reputational risks and the reaction
of the companies’ employees or customers to the transaction;
diversion of management time on acquisition-related issues; that
the COVID-19 pandemic, including uncertainty and volatility in
financial, commodities and other markets, and disruptions to
banking and other financial activity, could harm TriCo and Valley's
business, financial position and results of operations, and could
adversely affect the timing and anticipated benefits of the
proposed acquisition; and those factors and risks referenced from
time to time in TriCo’s filings with the Securities and Exchange
Commission (the “SEC”), including in TriCo’s Annual Report on Form
10-K for the fiscal year ended December 31, 2020, its Quarterly
Reports on Form 10-Q for the periods ended March 31, 2021, and its
other filings with the SEC. For any forward-looking statements made
in this communication or in any documents, TriCo and Valley claim
the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of
1995.
Annualized, pro forma, projected and estimated numbers in this
document are used for illustrative purposes only, are not forecasts
and may not reflect actual results. Except to the extent required
by applicable law or regulation, each of TriCo and Valley disclaims
any obligation to revise or publicly release any revision or update
to any of the forward-looking statements included herein to reflect
events or circumstances that occur after the date on which such
statements were made.
Additional Information
In connection with the proposed transaction, TriCo will file
with the SEC a registration statement on Form S-4 that will include
a Proxy Statement of Valley and a Prospectus of TriCo, as well as
other relevant documents concerning the proposed transaction.
Shareholders of Valley are urged to read the registration statement
and the Proxy Statement/Prospectus regarding the transaction when
they become available and any other relevant documents filed with
the SEC, as well as any amendments or supplements to those
documents, because they will contain important information about
the proposed acquisition.
A definitive Proxy Statement/Prospectus will be sent to the
shareholders of Valley seeking any required shareholder approvals.
Investors and security holders will be able to obtain the
documents, and any other documents TriCo has filed with the SEC,
free of charge at the SEC’s website, www.sec.gov. Investors will
also be able to obtain these documents, free of charge, from Valley
by accessing its website at www.valleyrepublic.bank under the tab
“Investor Relations” or from TriCo at www.tcbk.com under the tab
“About” and then under the heading “Investor Relations.” Copies can
also be obtained, free of charge, by directing a written request to
TriCo Bancshares, Attention: Corporate Secretary, 63 Constitution
Drive, Chico, California 95973 or to Valley Republic Bancorp,
Attention: Corporate Secretary, 5000 California Avenue, Suite 110,
Bakersfield, CA 93309.
Participants in the Solicitation
TriCo and Valley and certain of their directors and executive
officers may be deemed to be participants in the solicitation of
proxies from the shareholders of Valley in connection with the
proposed merger. Information about the directors and executive
officers of TriCo is set forth in the proxy statement for TriCo’s
2021 annual meeting of shareholders, as filed with the SEC on a
Schedule 14A on April 16, 2021 and as amended by supplements to the
proxy statement filed with the SEC on April 16, 2021. Additional
information regarding the interests of those participants and other
persons who may be deemed participants in the transaction may be
obtained by reading the Proxy Statement / Prospectus regarding the
proposed acquisition when it becomes available. Free copies of this
document may be obtained as described in the preceding
paragraph.
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version on businesswire.com: https://www.businesswire.com/news/home/20210727006197/en/
TriCo Bancshares: Rick
Smith, President & Chief Executive Officer, (530) 879-4299
Peter Wiese, Executive Vice President & Chief Financial
Officer, (530) 879-4299 John Fleshood, Executive Vice President
& Chief Operating Officer, (530) 879-4299
Valley Republic
Bancorp: Gene Voiland,
Chairman of the Board, (661) 333-6418 Geraud Smith, President &
Chief Executive Officer, (661) 371-2000
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