Heritage Oaks Bank in Paso Robles, Calif., is buying a branch from a competitor to replace a location it closed this year.
The $1 billion-asset bank unit of Heritage Oaks Bancorp (HEOP) on Monday announced it would acquire a branch in Morro Bay from Coast Bancorp (CTBP) in San Luis Obispo, Calif.
Heritage Oaks has agreed to pay a 2.2% premium to assume $30 million of deposits. No loans are involved in the deal.
Heritage Oaks shuttered its Morro Bay branch earlier this year, it said in a press release, because its lease was up and the size and location of the branch "were not optimal." Following that branch's closure, the nearest branch for Morro Bay customers was 13 miles away in San Luis Obispo.
"Our Morro Bay customers have been very loyal," Simone Lagomarsino, the chief executive of Heritage Oaks, said in a press release. "More than 80% of their deposits remained with us since the branch consolidation earlier this year."
Heritage Oaks' bid was the best of several it received, Coast said in a separate release. Coast, a $134 million-asset company, is struggling to return to profitability.
"This sale helps strengthen the bank financially by both increasing Coast's capital ratios and further reducing the bank's operating expenses, which in turn will help increase its profitability," said Anita Robinson, the CEO of Coast. It has three other offices.
The transaction is expected to close by yearend and would give Heritage Oaks 12 branches along California's central coast.