Westamerica Bancorp. of San Rafael said Tuesday that it will acquire Fresno-based ValliCorp Holding Inc. for about $300 million in stock, a deal that would create California's eighth-largest commercial bank.
The combined bank would have $3.77 billion in assets, about 115 branches and one of the biggest market shares in the central part of the state, from north of San Francisco to Bakersfield.
"It enhances the value of the franchise as the two create the largest independent bank north of Los Angeles," said Joseph Morford, a bank analyst at Alex. Brown & Sons.
The announcement comes amid a spate of mergers among California banks and thrifts, as companies seek to move into new markets, increase revenues and cut costs by closing overlapping branches and other operations.
Shares of ValliCorp rose 75 cents to close at $19.50; Westamerica fell 25 cents to close at $52. Both trade on Nasdaq.
ValliCorp, which operates 58 branches in the Central Valley as ValliWide Bank, had $1.3 billion in assets at the end of the third quarter.
Westamerica operates 57 branches and had third-quarter assets of $2.5 billion.
Investors and analysts said Westamerica has a track record of cutting costs when merging with companies operating near or in the same markets.