American Commercial Bank, Ventura, Calif., with $134 million of assets, signed a definitive agreement July 7 to buy neighboring Channel Islands Bank in a tax-free stock swap.

The combined operation would have $220 million of assets, seven branches, and 145 employees in Ventura, Oxnard, and Camarillo.

Terms of the agreement were not disclosed. The transaction, subject to regulatory and shareholder approvals, is expected to close in the fourth quarter.

American Commercial said the merger makes sense because of increased competition from larger institutions headquartered outside the area. The combined entity would use the American Commercial name.

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