Upon completion of the deal, the combined entity will be called American Riviera Bank, which will become the second largest bank based in the City of Santa Barbara with assets of over $400m.
The new bank formed will have an expanded footprint with branches in Santa Barbara, Montecito, and Goleta, as well as full-service mortgage and small business administration lending departments.
It will also have a large legal lending limit, which will be enough to meet the needs of the community and higher than either of the banks previously held.
The Bank of Santa Barbara executive vice president and COO Joanne Funari said:"Obtaining the approval of our shareholders to proceed with the merger affirms their confidence in the merger and the resulting benefits to our customers and our community.
"We are all very excited as we are one step closer to offering our current and prospective clients all the benefits of our combined Bank."
As per the terms of the deal, Bank of Santa Barbara shareholders will receive a total of 1,586,000 shares of American Riviera Bank common stock equating to an exchange ratio of 0.8546 shares of American Riviera Bank for each common share of Bank of Santa Barbara.
Upon receiving all necessary approvals, the merger is expected to be completed in the fourth quarter of 2015.
