TriCo Bancshares in Chico, Calif., has agreed to buy FNB Bancorp in San Francisco.
The $4.7 billion-asset Trico said in a press release Monday that it will pay $315.3 million in stock for the $1.3 billion-asset FNB. The deal is expected to close in the second quarter.
The deal marks TriCo’s expansion into the San Francisco area, where FNB has 12 branches, $800 million in loans and $1 billion in deposits.
“We strongly believe that the Bay Area will benefit from our full-service community banking approach that combines contemporary products and services with personal service and community engagement,” Richard Smith, Trico’s president & CEO, said in the release.
“The transaction will strengthen the TriCo franchise and provide us with improved growth opportunities, greater earnings power and … meaningful operational scale,” Smith added.
Two FNB directors will join Trico’s board.
TriCo said it expects the deal to be 2% accretive to its 2018 earnings, excluding $12.5 million in transaction costs, and 8% accretive the next year. The company plans to cut about 28% of FNB’s annual noninterest expense, or roughly $8.7 million.
It should take about 4.7 years to earn back the expected 6.6% dilution to TriCo’s tangible book value.
TriCo was advised by Stephens and Sheppard, Mullin, Richter & Hampton. FNB was advised by Courtney Group and Dodd Mason George.