As per the agreed terms, Coast Bancorp operations will be merged into Sierra Bancorp and Coast National Bank will be merged into Bank of the Sierra.
Coast Bancorp and Sierra Bancorp are parents of Coast National Bank and Bank of the Sierra respectively.
Coast National Bank serves consumers and businesses through three locations throughout San Luis Obispo County. As of 30 September 2015, the bank had approximately $146.4m in assets.
Based in California, Sierra Bancorp has assets worth $1.7bn. Bank of the Sierra is a multi-community financial institution that offers a full range of retail and commercial banking services, primarily in the central and southern sections of the San Joaquin Valley.
Sierra Bancorp would offer $3.2m in cash and 581,753 shares of its common stock to Coast Bancorp shareholders.
The transaction is valued at around $13.8m based on the closing price of Sierra Bancorp common stock on 4 January this year. However, the value of the deal will fluctuate with changes in Sierra Bancorp’s stock price.
Sierra Bancorp CEO Kevin McPhaill said: "We are excited that the employees and customers of Coast National Bank will join the Bank of the Sierra family. Expansion to California’s central coast presents an exciting growth opportunity for Bank of the Sierra.
"This transaction is positive for our shareholders. 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."
