Regional lender CVB Financial will buy smaller rival Heritage Commerce in an $811 million all-stock deal, as it looks to expand its presence into the Bay Area that is a major powerhouse of the U.S. economy.
The deal will create a combined bank with about $22 billion in assets, the banks said on Wednesday.
Dealmaking has accelerated in the regional banking industry this year, as a friendly regulatory environment under the Trump administration encourages lenders to pursue acquisitions to gain scale.
“This merger will provide us with comprehensive geographic coverage of all the major business banking markets in California,” said CVB Financial CEO David Brager, adding it was the largest acquisition by assets in the bank’s history.
Shares of Heritage Commerce, which has $5.6 billion in assets, rose 2% in extended trading, while those of CVB Financial were flat.
Under the terms of the deal, Heritage Commerce shareholders will receive 0.65 shares of CVB Financial for each share held. The deal values Heritage Commerce at $13 per share, representing a 6.5% premium to the stock’s last close.
The deal, which is expected to close in the second quarter of 2026, is expected to boost CVB Financial’s 2027 earnings per share by 13.2%.
Upon the completion of the deal, CVB Financial shareholders will own 77% of the combined bank, while Heritage Commerce shareholders will own 23%. Heritage Commerce CEO Clay Jones will join CVB Financial as president.
J.P. Morgan and Manatt, Phelps & Phillips advised CVB Financial, while Piper Sandler and Wachtell, Lipton, Rosen & Katz advised Heritage Commerce on the deal.
Source: Reuters.com