Bay Commercial Bank in Walnut Creek, Calif., is moving into the Silicon Valley market with a deal to acquire the $66 million-asset Global Trust Bank for $15.3 million in cash and stock.
The deal would combine two young banks that are focused primarily on commercial customers. Bay Commercial, founded in 2004, has three branches in the East Bay, and Global Trust, founded in 2008 largely to cater to the Indian-American business owners, has one branch in Mountain View. The combined bank would have roughly $263 million of assets, $183 million of loans, and $186 million of deposits.
In a news release Monday, Global Trust Chairman Vinod Thukral said the bank was selling itself because it had reached a "crossroads on its future." Though its asset quality was strong - it reported no chargeoffs or past due loans as of Dec. 31, 2010 - the bank had yet to turn a profit or fully deploy its capital since it opened in December 2008. At Dec. 31, its total risk-based capital ratio was 39.23%, according to Federal Deposit Insurance Corp. data.
"We expect only good changes to come from this alliance with a very strong and well-managed bank," Thukral said.
The sale is expected to close in the third quarter.