TriCo Bancshares entered into an agreement to acquire Valley Republic Bancorp for approximately $190 million.
Geraud Smith and Valley team will join TriCo and Geraud Smith will continue leading the combined entity. One director of Valley will join TriCo's Board of Directors. It also provides for one director of Valley to join TriCo's Board of Directors. The transaction is contingent upon approval from Valley's shareholders, receipt by each party of a tax opinion to the effect that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, all regulatory approvals, the registration statement being declared effective, the shares of TriCo Common Stock to be issued to the Valley shareholders as the Merger Consideration shall have been approved for listing on Nasdaq, and the holders of no more than ten percent (10%) of the aggregate outstanding shares of Valley Common Stock shall have properly notified Valley under Chapter 13 of the CGCL that they intend to exercise their dissenters' rights. The agreement has been unanimously approved by the Board of Directors of TriCo and Valley. The special meeting of Valley shareholders is to be held on December 17, 2021. On December 17, 2021, the shareholders of Valley Republic Bancorp voted to adopt and approve the Agreement. TriCo and VRB have received regulatory approvals from the Federal Deposit Insurance Corporation and the California Department of Financial Protection and Innovation for the proposed merger of their subsidiary banks, Tri Counties Bank and Valley Republic Bank, immediately following the Merger. TriCo's application to the Board of Governors of the Federal Reserve System seeking approval of the Merger is still pending. As of March 1, 2022, all required federal and state regulatory approvals for the merger have been received. The transaction is expected to close in the fourth quarter of 2021. As of October 22, 2021, the transaction is expected to close in the fourth quarter of 2021 or the first quarter of 2022. As of December 22, 2021, the transaction is expected to close in the first quarter of 2022. The transaction is scheduled to close on or around March 25, 2022. The transaction is expected to be 5.5% accretive to TriCo's earnings per share in 2022, with 1.6% dilution to tangible book value per share, and a tangible book value earn-back of 2 years.
Keefe, Bruyette & Woods acted as financial advisor while David J. Gershon, Keith Gercken, Frank Dworak, John Crisp, Dmitriy Chelnitsky, Michael Chan and Jennifer Redmond of Sheppard, Mullin, Richter & Hampton LLP acted as legal advisor for TriCo. Stephens, Inc. acted as financial advisor and fairness opinion provider while S. Alan Rosen of Duane Morris LLP acted as legal advisor for Valley. Stephanie Manzanares from Broadridge Financial Solutions, Inc. (NYSE:BR) served as a transfer agent for Valley.