CBC Bancorp – Bay Community Bancorp Secure Regulatory Approvals For Merger

Photo: William Keller, CEO of Community Bank of the Bay (Left), Ash Patel, chairman and CEO of Commercial Bank of California. (Right)

By Navneet S. Chugh

IRVINE/OAKLAND, CA – The proposed merger between CBC Bancorp, the parent company of Commercial Bank of California (CBC), and Bay Community Bancorp, the holding company for Community Bank of the Bay (CBB), has reached a major milestone. Following months of review, all necessary regulatory approvals have now been secured, clearing the way for the merger to proceed.

The merger, which was first announced in May, will see CBC Bancorp acquire Bay Community Bancorp in an all-cash transaction valued at $14 per share. The final green light came from the Federal Deposit Insurance Corporation (FDIC), which approved the deal after similar approvals were granted by the California Department of Financial Protection and Innovation and a waiver from the Federal Reserve.

This merger will result in Community Bank of the Bay transitioning to a privately held institution, with its shares no longer publicly traded. Despite this change, CBB will continue to operate as a division of Commercial Bank of California, maintaining its focus on community banking.

“We are grateful for the FDIC’s diligence and professionalism in evaluating our application and approving this transaction,” said Ash Patel, chairman and CEO of Commercial Bank of California. “This approval brings us one step closer to finalizing this important transaction, which will allow us to better serve communities across California.”

William Keller, CEO of Community Bank of the Bay, echoed Patel’s enthusiasm. “We are excited about this latest milestone and look forward to a bright future together, creating a strong community bank that will serve the diverse needs of our customers,” Keller said.

Local and National Implications

This merger represents another chapter in the consolidation trend within the U.S. banking industry, where smaller community banks are increasingly merging with larger financial institutions to expand their reach and resources. While CBB is a smaller player with branches in Oakland, Danville, San Mateo, and San Jose, the acquisition by CBC, a larger financial institution, will strengthen its position in the competitive California banking market.

For the customers of both banks, the merger is expected to bring a greater range of services and enhanced financial stability, though it also signals the continued decline of independent community banks in the face of industry consolidation.

The terms of the deal indicate that shareholders of Bay Community Bancorp will receive $14 per share in cash, marking a substantial premium compared to the bank’s previous trading levels. Following the merger, Community Bank of the Bay will be owned by a limited group of shareholders and will no longer be listed on the public market.

About the Banks

Commercial Bank of California, based in Irvine, has been recognized for its financial strength and stability, earning a “Four-Star Excellent Bank” rating from BauerFinancial, Inc. The bank focuses on serving business and professional communities in Los Angeles and Orange counties. It also places a strong emphasis on community reinvestment, which has earned accolades such as being named one of Southern California’s Best Places to Work in 2022 and 2023.

Community Bank of the Bay, headquartered in Oakland, serves the financial needs of closely held businesses, professional service firms, and nonprofits in the San Francisco Bay Area. As California’s first FDIC-insured certified Community Development Financial Institution, CBB is known for its commitment to sustainable business practices, including the establishment of the Bay Area Green Fund, which finances environmentally responsible projects.

What’s Next?

With regulatory approval in hand, the merger is expected to close in the coming months. After the merger, customers will likely see minimal changes to their everyday banking experience, though CBB’s operations will be integrated under the CBC umbrella.

For both institutions, the merger marks an opportunity to enhance their community-focused banking services, while giving them a greater ability to compete in an increasingly consolidated market.

This acquisition is part of a broader trend in the banking sector, where community banks are either merging with larger entities or facing increased challenges in maintaining independent operations amid growing regulatory and competitive pressures.

Once the merger is complete, CBC will have a larger footprint across California, positioning itself as a stronger competitor in the state’s banking landscape.