Continuing its San Francisco Bay-area buying spree, Greater Bay Bancorp of Palo Alto, Calif., said Thursday that it has signed a definitive agreement to buy Bank of Santa Clara for $90 million of stock.
The announcement came six weeks after $2.6 billion-asset Greater Bay said it would buy Coast Bancorp of Santa Cruz for $125 million. The deal is its fifth in the area closed or announced within the past year.
Greater Bay, which operates six subsidiary banks, is expected to continue its expansion push until regulators close the window on deals that use pooling-of-interests accounting.
Bank of Santa Clara, which was founded in 1973 and has eight branches - in Milpitas, San Jose, and Sunnyvale - had been rumored as a takeover candidate since last summer. Shares of the $327 million-asset bank have risen 36% since July 1.
Greater Bay said the Bank of Santa Clara deal should close in the second quarter.
David Kalkbrenner, president and chief executive officer of Greater Bay, said the deal would strengthen his company in the booming Silicon Valley. "Bank of Santa Clara has built a solid business banking and retail franchise with an excellent reputation for service," he said.
Joseph K. Morford, an analyst at Dain Rauscher Wessels in San Francisco, said the move "just adds to the company's dominance as the independent bank operating in the San Jose to San Francisco market."
Bank of Santa Clara stockholders would get 0.83 share of Greater Bay for each share they own, if Greater Bay's average closing price is between $38.3875 and $44.6125. Calculated by Greater Bay's midday trading price of $42.1875, the deal's premium for Bank of Santa Clara shareholders would be 21%.
Shares of Bank of Santa Clara were up 1.45%, to $34.875, at midday Thursday; Greater Bay's stock was nearly unchanged.
Bank of Santa Clara shareholders would own 11% of Greater Bay's outstanding shares, assuming that it closes its previously announced deals for Mount Diablo Bancshares in Danville, Calif., and Coast Bancorp. These two deals also are expected to close in the second quarter.
