CBC Bancorp, the parent company of Commercial Bank of California (CBC), has announced a definitive agreement to acquire Bay Community Bancorp (OTC Pink: CBOBA), which owns Community Bank of the Bay (CBB). The transaction, valued at $14.00 per common share, represents a strategic consolidation of two significant banking entities in California. This merger will bring together assets totaling approximately $3.5 billion, creating a robust financial institution poised to serve California’s diverse banking needs more effectively.

Strategic Benefits and Future Vision

Ash Patel, chairman, CEO, and president of Commercial Bank of California, highlighted the merger’s strategic advantages, stating, “The alignment of our two institutions will create a unique banking franchise that better serves our employees and clients.” He emphasized that the merger would result in a transformative business bank with expanded product offerings tailored to community service across California.

Impact on Community Bank of the Bay

Post-acquisition, Community Bank of the Bay will transition to a privately held entity, maintaining its operational identity while becoming a division of Commercial Bank of California. This structure is expected to enhance the bank’s ability to grow while adhering to CBC’s core values, which include gratitude, respect, integrity, trust, courage, compassion, and humility.

William Keller, CEO of Community Bank of the Bay, expressed enthusiasm about the merger: “This transaction brings together two complementary institutions with long-standing ties to their communities and a relationship-based approach to banking.” Keller pointed out that the increased scale of the combined entity would allow for significant investments in new products and services, benefiting clients and boosting productivity.

Community Commitments and Legacy

Both banks have been deeply involved in their communities, contributing through various programs that support underserved businesses and foster community development. Notably, Community Bank of the Bay was the first financial institution in California to be certified as a Community Development Financial Institution (CDFI). Mukhtar Ali, president and chief credit officer, assured that the merger aims to “maintain the legacies of both banks and increase our collective impact,” with management continuing to operate locally to ensure stability and continuity for clients and communities.

Governance and Oversight Post-Merger

Following the merger, Community Bank of the Bay will establish a new advisory board to sustain its community engagement efforts, while its operations will be governed by the existing board of Commercial Bank of California. Keller will take the helm as chairman of the new CBB advisory board, with Ali serving as president.

Closing and Future Outlook

The transaction is anticipated to close between late 2024 and early 2025, subject to regulatory approvals, shareholder consent from both CBC Bancorp and Bay Community Bancorp, and other customary closing conditions. Ash Patel expressed optimism about the future, envisioning the creation of one of the best banking institutions in California focused on relationships, purpose, innovation, and impact, aiming to grow into a $5 billion bank.

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