With its $17.3 million acquisition of California Oaks State Bank, Encino-based California United Bank will expand its foothold in the Conejo and Simi Valleys, and become one of the largest banks in the San Fernando Valley. The acquisition, the first since CUB’s inception in 2005, will bring the bank’s total assets to $650 million and its deposits to $530 million. The transaction is expected to close in the fourth quarter of 2010. “I’m thrilled, this for us is an incredible opportunity to take a big step in an area that we think represents a lot of growth for us,” said David Rainer, President and Chief Executive Officer of California United Bank, after announcing the deal Aug. 26. “I think it’s a big day for all of our shareholders.” The acquisition follows an expansion strategy set forth during the bank’s inception that identified locations with very high density of small middle sized businesses. Following this effort to expand in local and adjacent markets with attractive demographics and to continue to build franchise value for its shareholders, CUB opened new offices in Glendale and Orange County earlier this year. The bank started a loan production office in the Conejo Valley area two years ago. “We’ve been setting our sights on the Thousand Oaks, Conejo Valley areas for several years,” Rainer said. “We had been trying to identify a way to get into that area in a bigger way and California Oaks has a nice history there, a good team, a culture very similar to ours in terms of customer service and we just felt the timing to pull the trigger and do the deal was now.” The critical mass of a larger institution will enable better penetration and services to those markets as CUB continues to build a strong franchise, said John Nerland, President and Chief Executive Officer of California Oaks State Bank, which operates full-service offices in the Conejo and Simi Valleys. “We believe this is a significant opportunity for our customers and employees and offers an excellent value for our shareholders by providing them the ability to participate in long-term growth opportunities, while also providing them immediate value,” Nerland said in a statement. Seizing opportunity The bank’s capital strength and the economic conditions of recent months which have caused turmoil in the banking industry, have allowed CUB to move forward with its expansion plans at an accelerated rate, said Rainer. “The locations have been pretty much predetermined from the very beginning but we’re probably a few years ahead of where we thought we’d be in terms of the timing in opening some of these offices.” The agreement, in which CUB will pay half in cash and the balance in the form of shares of CUB common stock, has been unanimously approved by the Boards of Directors of both banks and is subject to approval by bank regulatory authorities and the shareholders of both banks as well as other customary conditions. As of June 30, California United Bank had total assets of $532.0 million, total deposits of $420.2 million and seven offices. California Oaks State Bank had assets of $136.7 million, total deposits of $114.0 million and three offices. California Oaks State Bank shareholders will receive approximately $11.35 per share if the transaction closes by December 31, 2010 or $11.30 per share if the transaction closes after December 31, 2010, in the form of stock, cash or a combination of cash and stock, subject to the election and proration procedures set forth in the merger agreement.
