FRESNO, Calif. & GOLETA, Calif. - In a significant move within the banking sector, Central Valley Community Bancorp (NASDAQ: NASDAQ:CVCY) and Community West Bancshares (NASDAQ: CWBC) announced the shareholder approval of their merger. The decision was reached at special meetings held on Thursday, with the transaction expected to close on April 1, 2024, pending customary closing conditions.
The merger will bring together Central Valley Community Bank and Community West Bank, with the consolidated entity to operate under the Community West Bancshares name. This strategic move aims to create a stronger financial institution with a combined total of approximately $3.6 billion in assets and 27 banking centers across Central California.
James J. Kim, President and CEO of Central Valley, expressed confidence in the merger, highlighting the 44-year history of financial performance and the potential for expanded service offerings in Central California. Similarly, Martin E. Plourd, CEO and Director of Community West, emphasized the shared values and corporate cultures of the two banks, projecting greater opportunities for shareholders, clients, employees, and the community.
The integration process, including the conversion of operational systems, is slated for completion in the third quarter of 2024. The merger is anticipated to enhance professional employee development and maintain high service standards.
Central Valley Community Bancorp (NASDAQ:CTBI), established in 1979, currently operates 20 full-service banking centers, while Community West Bancshares serves California's Central Coast with seven branch banking offices.
The information in this article is based on a press release.
InvestingPro Insights
In light of the upcoming merger between Central Valley Community Bancorp (NASDAQ: CVCY) and Community West Bancshares, investors are closely monitoring the financial health and market performance of the involved entities. Central Valley Community Bancorp, in particular, presents some intriguing figures. As of the last twelve months as of Q4 2023, the company boasts a market capitalization of $204.45 million and a Price/Earnings (P/E) ratio of 8.01, indicating a possibly undervalued stock when compared to the broader market.
With a Price/Book ratio of 0.99 for the same period, CVCY is trading close to its book value, which could signal a potentially attractive investment opportunity for value investors. The company's revenue growth has been steady, with a 6.6% increase over the last twelve months as of Q4 2023, though the quarterly growth has shown a modest uptick of 0.38%. This suggests a consistent performance in generating income, an important factor when considering the financial synergy of the merger.
An InvestingPro Tip highlights the importance of looking at a company's revenue growth to understand its potential for expansion and scalability, particularly in the context of a merger. Additionally, the InvestingPro platform features PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to more in-depth analysis and a total of 12 additional InvestingPro Tips that could further inform investment decisions.
The upcoming merger is undoubtedly a significant event for both Central Valley Community Bancorp and Community West Bancshares. As the companies prepare to join forces, these financial metrics and InvestingPro insights offer a snapshot of Central Valley's current market position, which could be instrumental in assessing the future prospects of the combined entity.
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