Suncrest Bank To Acquire Security First Bank

M&A Deals
02.09.2016 11:15 am

Suncrest Bank and Security First Bank announced that they have entered into a definitive agreement whereby Security First Bank will merge with and into Suncrest Bank in a cash and stock deal, valued at $18.1 million, based on a per share valuation of Suncrest Bank stock of $8.25. Under the terms of the agreement, shareholders of Security First Bank can elect to receive either 1.21212 shares of Suncrest Bank common stock or $10.00 in cash for each share of Security First Bank common stock they hold, subject to an overall 50% stock and 50% cash split. The transaction combines two local community banks with strong customer relationships in their neighboring markets of Visalia and Fresno, and approximately $425 million in combined assets. The merger is subject to customary closing conditions, including the receipt of all regulatory approvals and the approval of the shareholders of Security First Bank.

In addition, Suncrest Bank also announced today that, subject to customary closing conditions, Castle Creek Capital Partners VI, L.P. will be making an investment of $5.6 million to acquire 678,788 shares of common stock of the bank at $8.25 per share, with the proceeds being used both to support the merger and future organic growth.

Suncrest Bank is headquartered in Visalia, CA, with approximately $320 million in total assets at June 30th, 2016 and operates four branches located in Visalia, Porterville, Yuba City and Kingsburg. Security First Bank is headquartered in Fresno, CA, operating one branch with approximately $105 million in total assets at June 30th, 2016. The combined bank will continue to operate all five branches under the Suncrest Bank name, offering increased lending capacity, an expanded product set, and the same outstanding level of customer service. Suncrest Bank President and CEO, Mr. Ciaran McMullan will continue as the President and CEO of the combined bank following the completion of the merger, and Security First Bank President and CEO, Mr.Steve Jones will join the newly combined organization as its Chief Operating Officer.

"We are delighted to be partnering with another local community bank who shares our deep commitment to customer service and community involvement, and who has a proven ability to execute on its strategic plan," said Steve Jones, President and CEO of Security First. "We are equally delighted for our shareholders and customers who will benefit from the combination of our two organizations," added Jones.

Ciaran McMullan, President and CEO of Suncrest Bank said, "I and the entire leadership group at Suncrest are excited by the opportunity to work with the Security First Bank team, and to help them build on the successes they have already achieved." McMullan added, "We are particularly pleased to be adding Steve Jones to our team, as he brings a unique combination of real, hands-on community banking leadership experience together with substantial big bank experience in M&A and systems conversion and integration."

Upon completion of the transaction, one Director from the Security First Bank Board will join the Board of the newly combined bank with the majority of the remaining Security First Bank Directors forming a new local market advisory Board, thereby ensuring continued local leadership in the Fresno market.

The Directors of Suncrest Bank and Security First Bank have unanimously approved the merger agreement and agreed to vote all shares of SBKK and SFRK owned or controlled by them, for approval of the merger agreement and merger.

MJC Partners, LLC acted as financial advisor and delivered a fairness opinion to the Board of Directors of Security First Bank. Grady & Associates served as legal counsel to Security First Bank. King, Holmes, Paterno & Soriano, LLP served as legal counsel to Suncrest Bank. In addition, MJC Partners, LLC acted as placement agent in conjunction with the offering by Suncrest Bank.