Citizens Business Bank to buy Ventura lender

The parent company of regional lender Citizens Business Bank in Ontario will buy a small Ventura County bank to help it quickly ramp up its presence there.

CVB Financial Corp. said it would buy County Commerce Bank in Ventura for about $41 million in cash and stock.

The transaction, approved by both banks’ boards and expected to close early next year, is the latest in a string of local bank deals that has driven down the number of regional and small Southern California banks.

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For Citizens, the deal is all about geography. The bank is one of the state’s larger regional lenders, with assets of $7.7 billion and branches across Los Angeles, Orange, Riverside and San Bernardino counties, as well as one in San Diego and a handful in the Central Valley.

It started pushing into Ventura County in April by opening a business banking office — not a typical retail branch — in Oxnard. County Commerce, which has $253 million in assets, operates four branches in the county.

“This really expands our footprint into an adjacent territory, up the 101 corridor,” said Christopher D. Myers, chief executive of Citizens and CVB. “It’s a growing marketplace.”

Myers said he plans to keep all of County Commerce’s branches and that the deal should result in few layoffs.

The purchase price, half in cash and half in stock, is relatively high for County Commerce. In recent bank deals, buyers have paid about 1.5 times a bank’s book value — that is, the difference between a bank’s assets minus its liabilities. In this case, Citizens is paying 1.7 times book value.

The pricey deal could set a higher bar for future Citizens acquisitions, said Richard Levenson, president of San Diego investment bank Western Financial Corp. “It’s going to be more difficult for them to have a conversation and offer significantly less than that.”

Myers said Citizens was willing to pay more than the going rate because of County Commerce’s clean balance sheet — it has no delinquent loans on its books — and its profitability. Records from the Federal Deposit Insurance Corp. show County Commerce has been profitable every year since 2004, the year after the bank was founded.

“This is a high-quality bank. It’s very well run,” Myers said.

Citizens is the latest bank to buy into the Ventura County market. Since 2010, four other banks there have been acquired by larger institutions with growth ambitions.

Ventura County will be left with just one locally headquartered bank: Ojai Community Bank, a tiny lender with branches in Santa Barbara, Ojai, Santa Paula and Ventura. That could crimp other lenders’ ability to expand into Ventura, Levenson said.

“These banks that are trying to grow through acquisition, they’re going to run out of acquisitions,” he said.

Twitter: @jkoren