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The $1.4 billion Frontwave Credit Union in Oceanside, Calif., said Wednesday it plans to acquire the $315 million Community Valley Bank in El Centro, Calif., for $56.4 million in cash. The transaction is expected to close during the second half of the year pending regulatory and shareholder approvals.
This marks Frontwave’s first bank acquisition, the first one of the year and the first-ever proposed purchase of a whole bank by a credit union that has been publicly announced in California. It should be noted, however, that in May 2011, the $1.2 billion Southland Credit Union in Los Alamitos was the first to acquire one bank branch from RMG Capital Corp., in Fullerton, Calif.
Community Valley Bank, CVB, recorded $258.4 million in loans, $276.3 million in deposits and $36.5 million in equity, according to its FDIC financial filings.
Founded in 2007, CVB’s 41 employees run a main office and five branches in El Centro, Brawley, Indio, Julian and Borrego Springs.
The state-chartered bank is a wholly-owned subsidiary of CMUV Bancorp., (CMUV), which is publicly traded on the OTC. Based on CVB’s outstanding shares on a fully diluted basis as of Jan. 21, and considering the anticipated satisfaction of certain obligations of CMUV Bancorp and CVB excluded from the purchase and assumption transaction, including the holding company’s indebtedness and tax liabilities, CMUV Bancorp expects that its shareholders would be entitled to receive approximately $25 per share upon liquidation, subject to certain adjustments, according to a prepared statement.
The bank’s 2024 third quarter financial report showed it had more than 1.7 million shares outstanding.
Frontwave’s board of directors endorsed acquisition strategies as a component of the credit union’s future growth strategy.
“We believe that quality growth and diversification is essential to continued success in our industry, and we intend to achieve it both organically and through mergers or acquisitions,” Frontwave President/CEO Bill Birnie said in a prepared statement.
The credit union said the proposed acquisition would add new market areas in the San Diego and Riverside counties, which the credit union currently serves, while also enabling it to expand into Imperial County. Additionally, CVB will benefit by gaining access to Frontwave’s full suite of consumer financial services while the credit union will benefit from CVB’s business banking products and services.
The credit union’s 253 employees operate 13 locations serving more than 128,000 members throughout San Diego, Riverside and San Bernardino counties.
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