Heritage Commerce Corp. (Nasdaq: HTBK) has agreed to buy Focus Business Bank.
The $1.7 billion-asset Heritage Commerce, based in San Jose, California, agreed to pay about $55 million for the $391 million-asset Focus, which is also based in San Jose. The deal is expected to close by the end of this year.
"The pooling of our resources and knowledge will enhance our capabilities, operational efficiencies, and community outreach," Walter Kaczmarek, Heritage Commerce's chief executive, said in an announcement late April 23. Kaczmarek added that the acquisition should be accretive to the company's 2016 earnings.
The deal comes as more banks pursue small and strategic acquisitions. Cleveland-based KeyCorp (NYSE: KEY), for example, bought Pacific Crest Securities, a technology-focused investment bank, as well as its branded credit card assets from Elan Financial Services. It plans to continue buying to perhaps offset disappointing first-quarter results, which have beendisappointing across the banking industry, as persistentlylow interest rates continue to squeeze marginsand fee businesses struggle to make up the difference.
Keefe, Bruyette & Woods and Buchalter Nemer advised Heritage Commerce. Sandler O'Neill and Manatt Phelps & Phillip advised Focus.