Greater Bay Bancorp of Palo Alto, Calif., said it would buy Bay Commercial Services in San Leandro for at least $25.5 million of stock.
The transaction-valued at 2.06 times Bay Commercial's book value and 17.3 times its earnings-would help Greater Bayexpand in the East Bay area.
Bay Commercial is the $144 million-asset parent of Bay Bank of Commerce, which has branches in San Leandro, San Ramon, and Hayward.
Greater Bay would issue 0.7134 share for each outstanding share of Bay Commercial-if its average closing price is between $27 and $31 per share when the deal closes. That would value the deal at $25.5 million to $29.2 million.
The purchase, announced Monday and expected to close in the fourth quarter, would boost Greater Bay's assets to $2.1 billion.