“Generally, what happens is we’ll open a loan production office and ultimately it becomes a branch, but it’s usually after we have a certain number of customers,” said Rick Smith, chairman, president and chief executive officer of Tri Counties, the bank operating unit of TriCo Bancshares.
Smith said the plans are to eventually build the production center into a major lending center for commercial real estate loans, then possibly acquire a commercial bank to complement its new foray.
“It’s a little bit early (for an acquisition) because we want to make sure we can establish an identity down there. ... It’s about the trust relationship, and you can’t just buy that. But you can earn it. We’re in the earning phase right now, and assuming we are successful, that would certainly create another opportunity,” Smith said.
“There is going to be continued bank consolidation, and there’s generally a fall out of customers who may not fit the acquirer’s way of doing business. This could create some additional M&A down the road for us,” he added.
The proposed acquisition of Valley Republic in L.A. County’s northern suburb in Kern County would represent Tri Counties' fifth in a decade. Smith said he expects his latest acquisition to close before the end of 2021.
Tri Counties has previously looked to buy banks outside of California in border states like Arizona, Nevada and Oregon, but finding one to fit the bank’s community banking profile has become challenging.
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