The parent company of Porterville-based Bank of the Sierra announced Tuesday it has agreed to acquire San Luis Obispo-based Coast Bancorp, owner of Coast National Bank.
The proposed pairing of Sierra’s $1.7 billion asset base with Coast’s $146 million represents an expansion into the Central Coast by a financial institution with three branches in Bakersfield and many others around Kern County.
Sierra Bancorp said it signed an agreement to buy all Coast’s outstanding shares for $13.8 million in cash and stock, based on Monday’s closing price of Sierra’s publicly traded shares. It said the transaction was unanimously approved by both parent companies’ governing boards and now awaits regulatory approval.
“We are excited that the employees and customers of Coast National Bank will join the Bank of the Sierra family,” Bank of the Sierra President and CEO Kevin McPhail said in a news release. “Expansion to California’s central coast presents an exciting growth opportunity for Bank of the Sierra.”
“This transaction is positive for our shareholders,” he added. “The cash consideration allows us to leverage our existing capital and we believe this opportunity will enable us to further deploy capital via lending opportunities in San Luis Obispo and the surrounding communities.”
Coast National President and CEO Anita Robinson said in the same news release the acquisition will benefit her company’s shareholders while also giving the bank’s customers “access to many more products and services together with the additional benefit of a larger lending limit.”
“This transaction benefits our shareholders who have been steadfast during difficult times and rewards them with shares in BSRR, providing opportunity into the future,” she said.
Bank of the Sierra has 28 offices as far flung as Santa Paula, Tehachapi and Clovis. Coast National has three branches, one each in Arroyo Grande, Paso Robles and San Luis Obispo.
Coast National, established in 1997, fell on hard times during the recession.
Regulators ordered the bank to raise capital amid concerns for its solvency and poor loan quality.Things appeared to turn a corner in April 2014 when the federal Comptroller of the Currency ended an oversight order agreed to in February 2011 by the board of directors of the bank’s parent company.