Chico, CA-based TriCo Bancshares, parent company of Tri Counties Bank, agreed to acquire FNB Bancorp, parent company of First National Bank of Northern California, in a stock transaction valued at approximately $315.3 million in aggregate. The transaction will extend Tri Counties Bank’s presence into the San Francisco peninsula.
Based on financial information as of September 30, 2017, the combined company will have approximately $6.1 billion in assets, $5.0 billion in deposits, $3.7 billion in gross loans and 78 branches throughout California. Both boards of directors unanimously approved the transaction, and it now awaits further approval by shareholders and the usual regulatory bodies.
Richard P. Smith, president and CEO of TriCo, commented, “We are thrilled FNB NorCal has agreed to join with Tri Counties Bank, strengthening and growing our position as the premier Northern California community bank. The transaction will strengthen the TriCo franchise and provide us with improved growth opportunities, greater earnings power and the meaningful operational scale of an over $6 billion asset bank.”
Under the terms of the merger agreement, FNB shareholders will receive 0.980 shares of TriCo common stock in exchange for each share of FNB common stock they hold. The exchange ratio is fixed, subject to a trading collar. In total, FNB shareholders will own approximately 24% of the common stock of the combined company once the transaction is complete. Both parties have the right to terminate the agreement should certain conditions regarding the common stock prices develop.
The agreement provides for two directors of FNB to join TriCo’s board of directors.
TriCo was advised in this transaction by Stephens as financial advisor and Sheppard, Mullin, Richter & Hampton as legal counsel. FNB was advised by The Courtney Group as financial advisor and Dodd Mason George as legal counsel.