On Monday, Shares of Sierra Bancorp (NASDAQ:BSRR), lost -1.95% and closed at $26.69 in the last trading session. The last trading range of the stock ranges between $26.26 and $27.86.
Sierra Bancorp (NASDAQ: BSRR), the holding company of Bank of the Sierra, and OCB Bancorp (OTC: OJCB), parent company of Ojai Community Bank, declared the signing of a definitive agreement whereby BSRR will obtain OJCB. The combination solidifies Sierra Bancorp’s deposit market share in Ventura County and gives an entrée into Santa Barbara County.
As of December 31, 2016, OJCB had total assets of $256.60M, total loans of $209.20M and total deposits of $208.40M. OCB Bancorp is a locally possessed and operated holding company for Ojai Community Bank, Santa Barbara Community Bank, Ventura Community Bank and Santa Paula Community Bank. The transaction is expected to close throughout the final quarter of 2017, subject to customary closing conditions, numbering regulatory approvals and OJCB’s shareholder endorsement. The Boards of Directors of both companies have unanimously approved the transaction.
Under the agreement, OJCB common investors will be entitled to receive BSRR common stock in this stock-for-stock transaction. The total aggregate value of the transaction is about $35.70M or $14 per OJCB common share, subject to certain adjustments described in the merger agreement. In joining with Sierra, this represents a highly attractive transaction for OJCB. For Sierra, this acquisition is imagined to be right away accretive to earnings per share, and will yield a tangible book value earn back of less than 4.00 years and an IRR of around 20.00 percent.
Bank President and CEO Kevin McPhaill said, “We are amped up for recently’s declarement of Ojai Community Bank joining forces with us and welcome all Ojai workers, clients and investors into the Bank of Sierra family. Improving our presence on the Central Coast fits in with our long term planned plan. Adding branches in Ventura, Ojai and Santa Barbara boosts our commitment to serving those groups. We have been inspired by Ojai’s strong commitment to its groups, disciplined growth strategies, and achievement, and look onward to developing this part of our bank together.”
David Brubaker, President and CEO of OCB Bancorp and Ojai Community Bank, expressed, “We are very glad to be joining with Bank of the Sierra and trust this is an brilliant opening for our investors, clients and workers to understand enhanced value by being part of a larger financial institution with considerably deeper resources, operational scale and a steady stream of core earnings. I actually feel that our cultures or societies match very well and our focus on assisting the client, which is exceptional to community banking, is core to their strategy. Our clients will benefit with access to many more goods and services, together with fundamentally raised lending capacity, enabling us to meet more of the requirements of our clients and our society.”
McPhaill concluded, “This opening will facilitate us to use extra capital through lending chances in Ojai, Ventura, Santa Barbara and nearby groups. Furthermore, we anticipate this transaction will be very positive for our investors.”
As of December 31, 2016, Sierra Bancorp on a pro forma basis with OCB Bancorp would have had total resources of $2.30B, total loans outstanding of $1.500B and total deposits of $1.90B.
Analyst recommendation for this stock stands at 3.00.