CVB Financial Corp. to Acquire Heritage Commerce Corp. in $811 Million Deal
Ontario, California-based CVB Financial Corp. has announced its acquisition of Heritage Commerce Corp. in a deal worth approximately $811 million. This acquisition is set to bolster CVB Financial Corp.’s presence in the Bay Area, creating a stronger foothold in the region.
The transaction, expected to close in the second quarter of 2026, will result in the formation of a bank with a combined $22 billion in assets and more than 75 locations. The merger will bring San Jose-based Heritage Bank of Commerce under the umbrella of Orange County’s Citizens Business Bank, which previously held around $15 billion in assets and operated approximately 60 locations.
Key Players in the Merger
David Brager, CEO of Citizens Business Bank, expressed his enthusiasm for the merger, stating, “This merger will provide us with comprehensive geographic coverage of all the major business banking markets in California, while ensuring the preservation of the local focus, stability, and deep trust inherent in our relationship banking model.” Brager is slated to continue as the chief executive of the combined entity.
Clay Jones, CEO of Heritage Commerce Corp., also shared his thoughts on the deal, calling it “a testament to the proven value and enduring potential of our relationship-focused approach.” Jones will take on the role of president within the combined bank, emphasizing the growth opportunities and expanded offerings that the merger will bring for employees and shareholders alike.
Market Activity and Trends
The Citizens-Heritage deal is part of a larger trend in the California banking sector, with another significant merger announced on the same day. Fresno-based Community West Bank agreed to acquire United Security Bank for approximately $191.9 million, reflecting a wave of consolidation and strategic partnerships within the industry.
These recent deals mark a continuation of the 2025 bank M&A cycle, following significant transactions such as Capital One’s acquisition of Discover and mergers involving Eastern Bank, HarborOne, and Cadence Bank. The California market has been a focal point for these transactions, with notable acquisitions like Pacific Premier Bank by Columbia Banking System.
Financial Details and Outlook
As part of the agreement, Heritage investors will receive 0.65 shares of CVB Financial common stock for each share they own, with the total transaction valued at $811 million based on CVB Financial’s closing stock price of $20. Following the completion of the merger, two Heritage directors will join the Citizens’ board.
The transaction is expected to have an immediate positive impact on Citizens’ earnings per share, with further growth projected for 2027. While the deal may result in a dilution of tangible book value per share, the earn-back period is estimated to be around 2.5 years, indicating a strategic long-term investment for both parties involved.
Sources: Banking Dive
