SANTA ROSA -- Shareholders have approved the merger of AltaPacific Bancorp (OTCBB: ABNK) and Covina California-based Stellar Business Bank, a proposed deal first announced in September and one that nearly doubles the value of assets held by AltaPacific Bank, according to a release today.
The combined institution, which remains AltaPacific Bank, will have more than $202 million in assets and equity capital in excess of $43 million. Shareholders of Stellar Business Bank will receive 0.8443 shares of AltaPacific Bancorp stock in exchange for their current shares.
Shareholders of AltaPacific approved the merger at a special Feb. 1 meeting, and Stellar’s shareholders voted to approve the move on Thursday. Regulators have also signed off on the plan, and AltaPacific said that it expected the merger to close at 5:01 p.m. on Friday, Feb. 17.
“We look forward to the growth and expansion opportunities created through the combination of these two quality institutions,” said Tim Jorstad, chairman of AltaPacific Bancorp’s board of directors, in a written statement.
Stellar Business Bank maintains two offices in Covina, a town outside of Los Angeles. Their main office includes a dedicated SBA department, with administrative offices elsewhere in town.
AltaPacific maintains a branch in Rancho Cucamonga, also in Southern California. Its headquarters is in Santa Rosa.
The merger increases AltaPacific's footprint in Southern California, a market that Chief Financial Officer Allen Christenson said is familiar to many members of the staff. The bank is also considering further expansion in the Bay Area.
"I think (the merger) did a good job of signalling to that market that we really are committed," he said. "Now that we're a little bigger, we can set our sights a little higher."
The merger will also add lending backed by the U.S. Small Business Administration to the options available to AltaPacific customers, he said. Stellar Business Bank is a preferred lender through the SBA, a designation that allows for a streamlined loan process.
AltaPacific released the news along with the announcement of their earnings in quarter ending Dec. 31. For the year, the bank earned $304,000 and saw its assets grow by 44.5 percent, to a total of $115.3 million.
Net income decreased from the end of 2010, when the bank earned $902,000. AltaPacific Bancorp President and CEO Charles Hall attributed that decrease to the one-time costs associated with the merger and the opening of a new branch in Rancho Cucamonga.
Total loans decreased by 2.7 percent, to $59.9 million, compared to the end of the prior year. However, net interest income rose more than $50,000 compared to the end of 2010, to $5.15 million at the end of 2011. Deposits grew 62.1 percent, to $76.4 million.
The bank lowered its allowance for loan losses to $1.3 million at the end of 2011, down from $1.4 million at the end of the prior year.
“We continue to be successful in growing the company during these tough economic times,”Mr. Hall said. “TO be able to sustain our profitability during this economic climate has been a tremendous achievement.”