Valley Community Bank (fka VCBC)

[BigCat]

Bay Commercial Bank Announces Successful Completion of the Merger With Valley Community Bank

WALNUT CREEK, Calif., Feb. 17, 2015 (GLOBE NEWSWIRE) -- Bay Commercial Bank (OTC:BCML) announced today the successful merger of Valley Community Bank, Pleasanton, California into Bay Commercial Bank, effective after close of business on Friday, February 13, 2015. The final price per share was $4.22 resulting in a conversion ratio of 0.345.

"We at Valley Community Bank are pleased and excited about becoming a part of Bay Commercial Bank and having the advantage of their size, number of branches, and diverse package of products and services to offer our clients" said Rick Loupe, President and CEO of Valley Community Bank.

George Guarini, President and Chief Executive Officer of Bay Commercial Bank, said: "We are extremely pleased and proud to be able to announce the consummation of this merger. The addition of the three offices, Pleasanton, Livermore and San Jose, help to fill in our physical footprint in the greater Bay Area."

"We welcome the clients, employees and shareholders of the former Valley Community Bank and look forward to jointly capitalizing on the strengths of both our banks. The combination of our banks strengthens not only Bay Commercial Bank's already strong capital base, but enhances our Northern California market reach with 10 offices serving the five contiguous counties of Contra Costa, Alameda, Santa Clara, Napa, and San Joaquin."

Guarini continued, "With this acquisition Bay Commercial Bank has total assets exceeding $600 million and a capital base of more than $68 million allowing us to continue building scale by a combination of organic and strategic growth.


Read more at http://www.stockhouse.com/news/press-releases/2015/02/17/bay-commercial-bank-announces-successful-completion-of-the-merger-with-valley#z5QSwZEEmmSt0qMt.99


http://www.stockhouse.com/news/press-releases/2015/02/17/bay-commercial-bank-announces-successful-completion-of-the-merger-with-valley

[Renee]

VCBC: Stock Merger. Every one (1) share of common stock of Valley Community Bank (VCBC) issued and outstanding shall be converted into 0.345 shares of common stock of Bay Commercial Bank (BCML)

Finra deleted symbol.

http://otce.finra.org/DailyList

[BigCat]

VCBC at a NEW 52wk high, $4.00.
With a large 9600 share bid at $4.00. Next up $4.15.

[BigCat]

BCML volume at 475K today!!!

$5.7 million!!!

[BigCat]

The same party bidding on BCML today could be the same party bidding here today... Quite possible!

[BigCat]

Someone is snagging a boatload of value today!

[BigCat]

Update, Bid: $3.53. ;)

[BigCat]

The possibility to snag value may still be alive and well.

Bid: $3.52

[Enterprising Investor]

Termination of a Material Definitive Agreement (11/14/14)

On November 10, 2014, the registrant, FNB Bancorp, a California corporation and the parent company of First National Bank of Northern California, a national banking association (the "Bank"), received a notice of termination of the Agreement and Plan of Reorganization and Merger (the "Merger Agreement") signed on May 22, 2014 by and among FNB Bancorp, the Bank and Valley Community Bank ("VCB"). The Board of Directors of VCB determined that a notice of termination was required in order to comply with their fiduciary duties to the shareholders of VCB and because VCB had entered into a definitive agreement to be acquired by Bay Commercial Bank. Under the terms of the Merger Agreement, FNB Bancorp was expecting to acquire VCB through the merger of VCB with and into the Bank.

Upon this termination of the Merger Agreement, VCB became obligated to pay to FNB Bancorp, on demand, the sum of $500,000 as liquidated damages for expenses incurred and the lost opportunity cost for time devoted to the transactions contemplated by the Merger Agreement. On November 13, 2014, FNB received the payment of this termination fee.

http://www.sec.gov/Archives/edgar/data/1163199/000101905614001419/fnb_8k.htm

[Enterprising Investor]

Turn out the lights. The party is over!

We now know why the Board of Directors was in a hurry to sign a deal - there are 500,000 reasons.

[BigCat]

I don't think your theory or possible scenario is out of the question since we don't necessarily get all the details. If I had to guess they looked at both offers and took the better of the two... But that's assuming that the 3rd bank involved placed an offer already. Which, remains a possibility and a mystery. I guess time will tell... Could we get $4.25, $4.50... $5.00?! Would be sweet...

[SaltyMutt]

Amen bro. Preach on!

[Enterprising Investor]

The Board could have simply issued a different press release.

The Board announces the termination of the FNBG merger, receipt of two unsolicited offers and intention to seek other bids. To borrow a phrase from the modeling industry, the "go see" period could have lasted 30 days. Interested parties could have contacted its law firm.

Just remember, "a bird in the hand is worth two in the bush".

The other parties might have just walked away.

[56Chevy]

It just occurred to me that our bank received offers from two other banks. And we know one of those offers was from Bay Commercial for $4.15 in an all stock deal...and it was a welcome improvement over the FNB offer....but we don't know who the other offer was from or what the offer was to rest assure we did our best.

The general assumption is whatever that anonymous bidders' offer was it must have been lower than Bay Commercials' offer...and therefore wasn't the best offer...end of story. However, is it really the end of the story considering managements penchant towards accepting offers that serve their own interests only. They've earned a questionable reputation from shareholders.

So how can shareholders be assured the Bay Commercial offer IS the best offer?...the answer is we can't..and it's a fair question.

I'm re-thinking this whole process... and until we see all the cards face up on the table I'm not ready to say Bay Commercial should be declared the winner!

This is about trust and fiduciary responsibility... and so far management hasn't shown they can be relied upon to deliver on either one!

===================

Marker:
Valley Community Ban (VCBC)
$3.95 0.0 (0.00%)
Volume: 0

[BigCat]

Based on 3rd Q numbers, BCML seems to be trading right at book value.

[BigCat]

Thanks bro!

[BigCat]

It makes complete sense. Thanks Chevy. The way it was worded seemed a bit confusing... It's a pretty straight-forward deal... The way it was worded confused me.

You have 3,000 shares too?!?!? ;)

[56Chevy]

Basically there are 3 types of acquisition terms when a company buys another. Some are in "all cash"...some are in "all stock"... and some are a combination of "cash & stock".

This offer from BCML is an all stock offer...meaning if you still hold VCBC shares when this deal is complete you will receive four dollars and fifteen cents ($4.15) worth of BCML stock...and the exchange rate will be based on what the book value of BCML is at month end prior to closing. So if for example the deal is completed Feb. 7th of 2015 then whatever the book value of BCML was the last day of January will be the number they use to do the math.

Since each stock sells at a different market price and they each have their own individual book value it cannot be a one for one exchange rate. It will have to be a fractional exchange.

I haven't put a pencil to it yet but to keep the math simple...purely hypothetical... let's say the book value of BCML is an even $12.45 @ share...the company is offering us $4.15 in value for our shares...then the exchange rate would be 3 for 1. In this example if I held 3,000 shares of VCBC today and I don't sell then I will receive 1,000 shares of BCML the day the deal is complete.

Hope this makes sense ;)

[Phaedrus77]

I believe it means that the # of shares received will depend on Bay's book value/share and not the market value/share.

So if Bay is trading above book value, you'd receive more than $4.15 in market value.

[BigCat]

"Bay Commercial Bank shares will be valued at the book value per share the month end prior to the closing of the transaction."

I'm a bit confused by this sentence... Anyone want to explain, please?

[Enterprising Investor]

Bay Commercial Bank has also agreed to assume the non-cumulative perpetual preferred shares of Valley Community Bank that are outstanding.

The preferred holders are probably happier, too.

Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A

$417.60

5,500

$2,296,800.00

Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B

$257.51

275

$70,815.25

[Enterprising Investor]

Valley Community in Calif. Ends Contested Sale to FNB, Finds New Buyer (11/10/14)

Bay Commercial Bank in Walnut Creek, Calif., has stepped in to outbid a rival to buy Valley Community Bank in Pleasanton, Calif.

The $503 million-asset Bay Commercial will pay $7.8 million in stock for the $130 million-asset Valley, based on the price per share and amount of stock outstanding, and will assume the seller's outstanding noncumulative preferred stock. The acquisition is expected to close in the first quarter.

Valley agreed in March to sell itself to FNB Bancorp in South San Francisco for roughly $6.2 million. FNB's acquisition had received approval from the Office of the Comptroller of the Currency, and was awaiting clearance from the California Department of Business Oversight when Bay Commercial stepped in with a higher offer.

The FNB offer had drawn a public objection from Taylor Asset Management in Chicago, which owns about 9.8% of Valley's stock. Stephen Taylor, the investment firm's chairman, had called the original deal "grossly unfair" to Valley's investors. He also took aim in a press release last month at the FNB deal's valuation — roughly half of the seller's book value — and $500,000 in payments to officers and insiders.

Bay Commercial and Valley did not disclose in a press release Monday if Valley had to pay a termination fee to FNB.

Bay Commercial was advised by Gary Steven Findley & Associates and The Findley Group. Valley was advised by Bryan Cave and Monroe Financial Partners, the same firms that advised it during the original agreement with FNB.

http://www.americanbanker.com/news/mergers-acquisitions/valley-community-in-calif-ends-contested-sale-to-fnb-finds-new-buyer-1071149-1.html

[56Chevy]

Right On...Thanx for the post bacc!

Bay Commercial Banks' offer is 25% higher than the offer from FNB Bancorp.

All things considered this is a much more equitable deal for the shareholders.

Fairness sought...fairness found.

Congratulations to all VCBC shareholders!

[BigCat]

Bay Commercial Bank and Valley Community Bank Announce Definitive Agreement to Merger of Valley Community Bank Into Bay Commercial Bank

https://globenewswire.com/news-release/2014/11/10/681832/10107426/en/Bay-Commercial-Bank-and-Valley-Community-Bank-Announce-Definitive-Agreement-to-Merger-of-Valley-Community-Bank-Into-Bay-Commercial-Bank.html

[bacc]

WALNUT CREEK, Calif. and PLEASANTON, Calif. , Nov. 10, 2014 (GLOBE NEWSWIRE) --
Bay Commercial Bank (OTCBB:BCML) and Valley Community Bank (OTCBB:VCBC),
announced today that they have entered into a definitive agreement pursuant to
which Valley Community Bank will be merged with and into Bay Commercial Bank for
stock. Under the terms of the definitive agreement Bay Commercial Bank will pay
$4.15 per share in stock for each outstanding share of Valley Community Bank .
Bay Commercial Bank shares will be valued at the book value per share the month
end prior to the closing of the transaction. Bay Commercial Bank has also agreed
to assume the non-cumulative perpetual preferred shares of Valley Community Bank
that are outstanding. The $4.15 price per share is subject to adjustments if the
common shareholder equity of Valley Community Bank as defined in the definitive
agreement is above $10.2 million or below $10.0 million the month end prior to
closing. The total assets of the combined banks on a pro forma basis at
September 30, 2014 are approximately $630.0 million . The transaction was
unanimously approved by the boards of directors of both banks. Completion of the
transaction is subject to regulatory and shareholder approvals, and other
customary closing conditions. Following the successful completion of these
steps, it is anticipated the transaction will close in the first quarter of
2015.




Image: Valley Community Bank logo




Valley Community Bank was previously in an agreement to be acquired by FNB
Bancorp and its banking subsidiary, First National Bank of Northern California ,
in a stock transaction valued at approximately $3.14 per share. While the
transaction with FNB Bancorp had received the approval of the Office of the
Comptroller of the Currency , FNB Bancorp was in the process of receiving
approval from the California Department of Business Oversight to offer its
securities to Valley Community Bank shareholders when Bay Commercial Bank made
its superior unsolicited offer. As a result, the Valley Community Bank board has
terminated its prior agreement to be acquired by FNB Bancorp .

George Guarini , President and CEO of Bay Commercial Bank , stated, "Let me start
by welcoming the Valley Community Bank staff. At the end of the day, our
business is only good as our people and we are looking forward to having them
join the Bay Commercial Bank family."

Guarini further stated "We are excited to have the opportunity to capitalize on
the strengths of both banks, allowing us to continue to build on our strong
capital base while extending our market presence in Pleasanton , Livermore and
San Jose . With 10 offices serving Contra Costa , Alameda , Napa , Santa Clara and
San Joaquin counties, we feel we will be well positioned to continue to take
advantage of organic and strategic growth opportunities. We look forward to
serving the clients and welcoming the shareholders of Valley Community Bank .


"At Bay Commercial Bank we say: 'It's About the Client. We believe it, we take it seriously and we show it.'"

Rick Loupe , President and CEO of Valley Community Bank stated, " Bay Commercial
Bank is an excellent partner for our customers and our shareholders will benefit
by becoming part of the Bay Commercial Bank family." Valley Community Bank
operates three offices serving Pleasanton , Livermore and San Jose , and as of
September 30, 2014 , total assets were $130 million . Valley Community Bank opened
in 1998 and currently trades on the Over the Counter Bulletin Board under the
symbol "VCBC." More information on Valley Community Bank is available at
www.vcb-ca.com.

Bay Commercial Bank began business in July 2004 and trades on the Over the
counter Bulletin Board under the symbol "BCML."  At September 30, 2014 , Bay
Commercial Bank had total assets of approximately $503 million with seven
banking offices in Northern California . Early this year Bay Commercial Bank
acquired Community Bank of San Joaquin in a cash transaction. More information
about Bay Commercial Bank may be obtained by visiting www.baycommercialbank.com.

Bay Commercial Bank was assisted by Gary Steven Findley and Associates and The
Findley Group for legal and investment banking services. Valley Community Bank
was assisted by Bryan Cave LLP for legal services and Monroe Financial Partners,
Inc. for investment banking services and the issuance of a fairness opinion.


Forward-Looking Statements
Certain statements in this press release contain forward-looking statements that
are based on management's expectations, estimates, projections and assumptions.
Words such as "expects," "anticipates," "plans," "believes," "scheduled,"
"estimates" and variations of these words and similar expressions are intended
to identify forward-looking statements. Forward-looking statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, as amended. These statements are not guarantees of future
performance and involve certain risks and uncertainties, which are difficult to
predict. Therefore, actual future results and trends may differ materially from
what is forecast in forward-looking statements due to a variety of factors.

All forward-looking statements speak only as of the date of this press release.
All subsequent written and oral forward-looking statements attributable to
either Bay Commercial Bank or Valley Community Bank , or any person acting on
their behalf are qualified by the cautionary statements in this press release.
Bay Commercial Bank and Valley Community Bank do not undertake any obligation to
update or publicly release any revisions to forward-looking statements to
reflect events, circumstances or changes in expectations after the date of this
press release.

This press release may be deemed to be solicitation material in respect of the
proposed merger of Valley Community Bank with Bay Commercial Bank . Valley
Community Bank intends to send its shareholders a proxy statement regarding the
proposed merger. Before making any voting or investment decision, investors and
security holders of Valley Community Bank are urged to carefully read the entire
proxy statement, when its becomes available, because it will contain important
information about the proposed transaction.


CONTACT: Bay Commercial Bank
Keary Colwell , CFO
[phone]

Valley Community Bank
Rick Loupe , President & CEO
[phone]
Image: Bay Commercial Bank Logo
Source: Bay Commercial Bank ; Valley Community Bank

[Enterprising Investor]

First National Bank of Northern California Reports Third Quarter 2014 Earnings of $0.44 Per Diluted Share (10/29/14)

FNB Bancorp (QTCQB: FNBG), parent company of First National Bank of Northern California (the “Bank”), today announced net earnings available to common shareholders for the third quarter of 2014 of $1,823,000 or $0.44 per diluted share, compared to net earnings available to common shareholders of $2,880,000 or $0.71 per diluted share for the third quarter of 2013. During the second quarter of 2014, FNB Bancorp signed a definitive agreement and submitted an application to the Office of the Comptroller of the Currency to purchase Valley Community Bank in an all stock transaction.

“During the third quarter of 2014, we were able to grow our loan portfolio, our securities portfolio and our total assets. Our borrowers began to utilize their lines of credit more than they have during the second quarter and real estate prices in the San Francisco Bay Area continued to rise. According to the Zillow Home Value Index, San Francisco home values are up 12.4% for the twelve months ended September 30, 2014. We are carefully watching the valuations currently being provided on our residential and commercial real estate appraisals as valuations surpass the highs before the last recession. Deposit trends during the third quarter were not as favorable. Overall, our deposits were down approximately $8 million or 1% from June 30, 2014 levels. The largest percentage declines were in the certificate of deposit segment of our deposit portfolio as brokered CDs obtained in our Oceanic Bank acquisition continue to mature and not be renewed. Declines were also noted in our savings and money market depository accounts, although at a lower decline rate. Total FHLB advances outstanding at the end of the third quarter were $16 million. Management has and will continue to utilize this low cost funding source when it is prudent to do so,” stated Tom McGraw, CEO.

[tables removed]

“During the third quarter, our net interest income and net interest margins increased when compared to the second quarter. The loan to deposit ratio increased to 74% at September 30, 2014 compared to 73% at year end. We are lending when it is prudent to do so, staying true to our conservative underwriting standards rather the increasing lending volume by accepting unwarranted risk into our loan pipeline. We continue to be “well capitalized” by regulatory capital standards. The Bank’s Tier 1 leverage capital ratio was 10.16% at September 30, 2014. The Bank’s Tier 1 risk-based capital ratio was 13.05% and our total risk-based capital was 14.30%. We also continue to look for bank acquisitions. A Form 8-K was filed with the SEC on October 23, 2014 which provided additional information concerning our pending acquisition of Valley Community Bank,” continued CEO Tom McGraw.

http://www.sec.gov/Archives/edgar/data/1163199/000101905614001335/ex99_01.htm

[BigCat]

VCBC: $3.75, New 52wk High.

[BigCat]

FNB Bancorp faces competition in buying Valley Community Bank

Friday, October 24, 2014, 2:36pm PDT

http://m.bizjournals.com/sanfrancisco/blog/2014/10/fnb-bancorp-valley-communty-bank-mergers.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+bizj_national+%28Bizjournals+National+Feed%29&r=full

[Enterprising Investor]

VCBC sets new 52-week high (10/24/14)

Valley Community Ban (VCBC)
$3.25 +$0.25 (8.33%)
Volume: 4,705 @ 12:18:19 PM ET

[56Chevy]

This is potentially a significant turn of events.

The registrant has also been notified by VCB that its Board of Directors received a letter from another California financial institution expressing interest in discussing a business combination with VCB and, after review, the Board of Directors determined, upon advice of counsel, that such letter constitutes a bona fide unsolicited offer for a business combination and that it would be inconsistent with the continuing fiduciary duties of the Board of Directors not to further explore a possible business combination with such financial institution and to engage in discussions and diligence gathering regarding the same.

Are somebodies "Revlon duties" finally kickin' in?? Better late than never!

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=105962362

[56Chevy]

Excellent.

We're not home free yet... but this is very encouraging news!

Small banks fly below the radar on Wall St...we've seen it time after time on dozens of them...but anybody that understands what's happening here with VCBC has a fantastic opportunity to make some money.

This won't remain undiscovered forever!

Marker:
Valley Community Bank (VCBC)
$ 3.00 0.00 (0.00%)
Volume: 0

[Enterprising Investor]

CDBO Hearing Postponed (10/23/14)

The registrant, FNB Bancorp, a California corporation and the parent company of First National Bank of Northern California, a national banking association (the "Bank"), has been notified by the California Department of Business Oversight that the public hearing (the "Hearing"), previously scheduled to be held on October 23, 2014 before the Commissioner of Business Oversight (or a person designated by the Commissioner) upon the application of FNB Bancorp for a permit authorizing the exchange of shares of its common stock for all of the outstanding shares of common stock of Valley Community Bank, a California banking corporation ("VCB"), as contemplated by the provisions of the Agreement and Plan of Reorganization and Merger signed by and among FNB Bancorp, the Bank and VCB on May 22, 2014 (the "Merger Agreement"), is being postponed until further notice. The California Department of Business Oversight decided to postpone the Hearing in order to allow time for the production of documents requested by the VCB shareholder identified on page 16 of the Notice of Hearing as a 9.8% shareholder who opposes the proposed merger of VCB with and into the Bank as contemplated by the Merger Agreement.

The registrant has also been notified by VCB that its Board of Directors received a letter from another California financial institution expressing interest in discussing a business combination with VCB and, after review, the Board of Directors determined, upon advice of counsel, that such letter constitutes a bona fide unsolicited offer for a business combination and that it would be inconsistent with the continuing fiduciary duties of the Board of Directors not to further explore a possible business combination with such financial institution and to engage in discussions and diligence gathering regarding the same.

A copy of the Merger Agreement, with exhibits, was filed as Exhibit 99.1 to the registrant’s Current Report on Form 8-K filed with the Commission on May 23, 2014, and is incorporated herein by reference. A copy of the Notice of Hearing dated September 25, 2014, issued by the Commissioner of Business Oversight and sent to all holders of the outstanding shares of VCB common stock and preferred stock, was filed as Exhibit 99.1 to the registrant’s Current Report on Form 8-K filed with the Commission on September 30, 2014 and is also incorporated herein by reference. Reference should be made to such Current Reports and the registrant’s Current Report on Form 8-K filed with the Commission on September 4, 2014 for additional information regarding the Merger Agreement.

http://www.sec.gov/Archives/edgar/data/1163199/000101905614001326/fnb_8k.htm

[56Chevy]

This approach was designed to preserve the value of the bank's deferred tax asset and thus further enhancing book value.

I agree with Taylor. Deferred Tax Assets for VCBC going forward are a huge consideration to our bottom line. Here for comparison sake <below> is another bank in this region that has taken advantage of it's DTA's. VCBC's would have very similar results. For Pan Pacific Bank utilizing their DTA's allowed them a way to open a new branch office.

Pan Pacific Bank Announces Recapture of $2.7M Income Related to DTA, Plans for New Branch in San Jose, CA

FREMONT, Calif., July 14, 2014 /PRNewswire/ -- Pan Pacific Bank (OTCBB: PPFC) today announced its unaudited financial results for the quarter ended June 30, 2014, including total assets of $110.3 million, net loans of $82.7 million and deposits of $88.3 million. "Pan Pacific Bank is pleased to report continued positive earnings with net after-tax earnings for the three and six months ending June 30, 2014, of $2,852,637 and $2,926,602, respectively," said Wayne Doiguchi, Pan Pacific Bank's CEO. "During the quarter, Bank management determined that it is more likely than not that the deferred tax asset (DTA) will be realized. Therefore, the second quarter tax expense includes a benefit or income of $2,740,245 related to the reversal of the valuation allowance for deferred tax assets."

==========================

*If Bankers had their own set of "Ten Commandments" -- Thou shalt NOT needlessly and carelessly abandon thy DTA's -- would be one of them! ":~O

[BigCat]

"Since making this proposal, I have received an expression of interest from two other banks."

-Definitely my favorite sentence from his letter!

[BigCat]

Valley Community Bank Investor Issues Open Letter to Shareholders

CHICAGO, Oct. 17, 2014 /PRNewswire/ -- Valley Community Bank's largest investor today issued an open letter to his fellow shareholders urging them to vote no on the proposed sale to FNB Bancorp. A copy of the letter can be found below.

"It has been encouraging to speak with numerous shareholders and receive overwhelming support against this deal," said Steve Taylor, Chairman of Taylor Asset Management.

"Shareholders have suffered under this management team and its poor performance for a number of years. It appears that they have had enough. Clearly, there is tremendous shareholder frustration here," said Taylor.

"I believe that the board ran a flawed process and may have put their own interests above the shareholders'," said Taylor. "And because of this, they have failed to realize the true value of this bank."

Taylor encourages fellow shareholders to contact him with their thoughts, comments and suggestions. He can be reached at 310-275-7947 or [e-mail].

Stephen S. Taylor
1376 North Doheny Drive
Los Angeles, California 90069
October 17, 2014

Dear Valley Community Bank Shareholder,

I am writing to you to share my objections to the pending merger (the "Proposed Merger") of Valley Community Bank ("VCB") into First National Bank of Northern California, a subsidiary of FNB Bancorp (collectively, "FNB"). By this letter I hope to identify other concerned shareholders, and I encourage you to contact me to discuss this matter further.

In the Proposed Merger, VCB board of directors has failed the common shareholders by:

Agreeing to a merger price of only $3.19 per share (based on recent trading in FNB), which equals only 56% of VCB's book value, when other recently announced merger transactions are closer to 120% of book value;
Allowing FNB to negotiate with the TARP investors, at the great expense of the common shareholders (at auction, the TARP shares were sold for aggregate cash of $2.37 million, while the aggregate consideration FNB will pay to repurchase those shares is $4.33 million, for aggregate profit of $1.96 million, or an 83% return measured from the October 2013 TARP auction to October 2014);
Accepting an all-stock deal with an OTCQB quoted company, leaving shareholders with a take-it-or-leave-it proposition – the Merger provides no cash to VCB shareholders, only the illiquid stock of FNB;
Limiting themselves to FNB early in the process, not conducting a check of other potential buyers and agreeing to an egregious break-up fee;
Protecting management's interests over shareholders by securing from FNB an assumption by FNB at full value of management's salary continuation agreements (paying salary after the executives no longer work for VCB), plus change in control payments to management aggregating $500,000 – cash taken directly out of the pockets of the common shareholders.
VCB's prospects are not so dim that the board of directors needed to agree to this deal. I believe alternatives were and are available that are better than the Proposed Merger. In fact, I proposed an alternative to the VCB board which would include a partial cash tender at a higher per share price than the Proposed Merger. This would have allowed shareholders the ability to cash out or to remain invested in VCB. This approach was designed to preserve the value of the bank's deferred tax asset and thus further enhancing book value. However, the Board concluded that proposal was not superior to the Proposed Merger. Since making this proposal, I have received an expression of interest from two other banks.

Please contact me if you share my concerns. I am considering and exploring alternatives to the Merger and would appreciate the opinions and ideas of other VCB shareholders.

Very truly yours,

Stephen S. Taylor, Jr.

SOURCE Taylor Asset Management

[56Chevy]

I realize that however SWS's BoD wouldn't have done this deal to begin with. Termination fees are part n' parcel to M&A deals no problem...but obligating a small bank to the tune of $500K in a lousy deal just screams irresponsibility :(

[Enterprising Investor]

Termination fees are part of nearly all merger agreements.

For example, if the SWS board of directors withdraws its recommendation in favor of the merger with HTH, SWS will be required to pay HTH a termination fee of $8,000,000.

[56Chevy]

re:TERMINATION OF THE MERGER AGREEMENT

VCBC's CEO Richard Loupe failed to mention the $500K termination fee his shareholders must pay if this deal with FNB is terminated. Our only hope of avoiding this fee is if the Fairness Hearing people don't approve the merger.

========================================

M. TERMINATION OF THE MERGER AGREEMENT

FNB Bancorp and VCB can mutually agree at any time to terminate the merger agreement without completing the merger, even if the shareholders of VCB have approved it. Also, the merger agreement can be terminated by either VCB or FNB Bancorp unilaterally if certain events occur, as described below. If the merger agreement is terminated, the merger will not occur.

< page 32 >

Either VCB or FNB Bancorp can terminate the merger agreement if:

The merger is not completed by December 31, 2014, unless this date is further extended by mutual agreement;

Any governmental agency denies or refuses to grant a required approval of the merger, unless the parties agree to appeal the denial or refusal or agree to file an amended application for the governmental approval;

VCB enters into an agreement by which it would be acquired in a business combination by another entity; or

The shareholders of VCB fail to approve the merger and there has not been a breach of one or more of the Shareholder Agreements.

FNB Bancorp can terminate the merger agreement if:

VCB breaches any representation or covenant in the merger agreement which would prevent the closing conditions from being satisfied, unless VCB cures the breach within 30 days after written notice from FNB Bancorp;

Any required governmental approval, consent or qualification includes or will not be issued without the imposition of any condition or requirement that would be materially burdensome to FNB Bancorp;

VCB fails to call a meeting of shareholders to approve the merger; or

The shareholders of VCB fail to approve the merger and there has been a breach of one or more of the Shareholder Agreements.

VCB can terminate the merger agreement if:

FNB Bancorp breaches any representative or covenant in the merger agreement which would prevent the closing conditions from being satisfied, unless FNB Bancorp cures the breach within 30 days after receipt of written notice from VCB.

Any termination described above must be made by written notice from the party seeking termination to the other party. In the event the merger agreement is terminated, it will become void and have no effect, except that the termination will not affect the provisions regarding payment of expenses, confidentiality, payment of any termination fees if applicable or any relevant general provisions of the merger agreement. In certain situations, a termination of the merger agreement will obligate VCB to pay $500,000 in liquidated damages to FNB (see Section O of this Notice, “Termination Fees”).

< page 33 >

If the merger agreement is terminated due to a party’s breach, the termination will not relieve the breaching party from its liability and the non-breaching party will retain all of its legal rights and remedies against the breaching party for its breach. Each party has acknowledged that money damages would be an insufficient remedy for any breach of the merger agreement and that irreparable damage would occur if the provisions of the merger agreement were not performed in accordance with its specific terms or were otherwise breached, and each party has agreed that each shall be entitled to an injunction or injunctions to prevent breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement in any federal or state court, in addition to any other remedy to which the parties are entitled by law or in equity. The merger agreement provides that in any action at law or suit in equity in relation to the merger agreement, the prevailing party in such action or suit will be entitled to recover its reasonable attorneys’ fees plus all of its other reasonable costs and expenses incurred in such action or suit.

[....]

O. TERMINATION FEES

VCB is required to pay FNB Bancorp $500,000 in liquidated damages if FNB Bancorp terminates the merger agreement for any of the following reasons:

The special meeting of VCB shareholders has concluded with a vote to approve the principal terms of the merger agreement and the merger but the requisite two-thirds (2/3) approval is not obtained and any one or more of the VCB directors has failed to perform his or her Shareholder Agreement.

VCB failed to call a meeting of VCB shareholders and disseminate to its shareholders a Proxy Statement/Prospectus containing the unanimous recommendation of the VCB board of directors.

VCB enters into a business combination with another entity prior to December 31, 2014, or if within six (6) months after December 31, 2014, VCB enters into a definitive agreement with respect to, or consummates the transactions contemplated by, a business combination with another entity and such entity had contacted VCB with an expression of interest in discussing a possible business combination prior to December 31, 2014.

Also, VCB is required to pay FNB Bancorp $500,000 in liquidated damages if VCB terminates the merger agreement to enter into a business combination with another entity because the VCB board of directors has received a bona fide unsolicited offer for a business combination of VCB with another entity, and reasonably determines, upon advice of counsel, that as a result of such offer, any duty to act or to refrain from doing any act pursuant to the merger agreement is inconsistent with the continuing fiduciary duties of the VCB board of directors to its shareholders.

< page 34 >

The payment of $500,000 would be FNB’s sole remedy for the failure of VCB to perform or comply with these particular promises -- FNB’s sole recourse for recovery of damages under these circumstances. Filing suit to recover the expenses it had incurred, and for its lost opportunity cost, was not deemed an adequate remedy for FNB. After good faith efforts by the parties to estimate damages for the anticipated harm, the parties agreed on $500,000 as a reasonable amount. The parties discussed a similar liquidated damages provision for VCB, applicable in other circumstances, which was declined by VCB so as not to be prevented or restricted from seeking general damages in a federal or state court.

http://www.sec.gov/Archives/edgar/data/1163199/000101905614001206/ex99_1.htm

*We now have 500 thousand more reasons to want new leadership in our boardroom ":~O

[56Chevy]

Mark Calvey the Senior Reporter for the San Francisco Business Times presented FNB Bancorp's CEO Mr. Tom McGraw with a hypothetical question regarding buyout if he were the one mulling over offers.

His answer was: "Consolidation within the industry is a reality and I see no signs of that abating. To loosely paraphrase 'The Godfather,' if somebody makes us an offer we can’t refuse, that would generously reward our shareholders, then yeah, we would give that kind of offer very serious consideration,"

Perhaps Mr. Calveys' next question should have posed the deal in reverse..for example: So Mr. McGraw if VCBC offered to buyout FNBK for 55% of its' book value would you and your BoD sign off on that deal? Somehow I think the answer would be an emphatic - Oh HELL no!

What's "good for the goose"..should at a minimum be "good for the gander"!

This FNB offer is anything but fair...we need new faces in the boardroom of VCBC.

[Enterprising Investor]

Notice of Fairness Hearing and Agreement and Plan of Reorganization and Merger (Exhibit A) received today.

[56Chevy]

FNB Bancorp CEO could have 'Godfather' moment if bank gets 'generous' buyout offer

Oct 9, 2014, 2:44pm PDT

[....]

South San Francisco-based FNB Bancorp's CEO Tom McGraw says he'd consider joining forces with Bank of Marin or Mechanics Bank at the right price.

[....]

"Consolidation within the industry is a reality and I see no signs of that abating. To loosely paraphrase 'The Godfather,' if somebody makes us an offer we can’t refuse, that would generously reward our shareholders, then yeah, we would give that kind of offer very serious consideration," McGraw said.

That's the posture any public company takes, given a board's fiduciary duty to shareholders. But it's important to remember the powerful efficiencies gained in combining banks, which could support a compelling price from the right buyer.

[....]

FNB is currently working on its own acquisition. The bank, which purchased Oceanic Bank in 2012, plans to buy Pleasanton-based Valley Community Bank.

Regulators plan to hold a "fairness hearing" on the FNB-Valley deal in San Francisco on Oct. 23. One Valley shareholder, Stephen Taylor Jr., has proposed to purchase up to 40 percent of Valley's shares he doesn't already own at a higher price than FNB plans to pay, according to a notice for the public hearing.

[....]

http://www.bizjournals.com/sanfrancisco/blog/2014/10/fnb-bancorp-ceo-bank-mergers-mechanics-bank-marin.html?page=all

*

"That's the posture any public company takes, given a board's fiduciary duty to shareholders.."

Well VCBC's board certainly didn't take this posture! How is FNB's offer for $3 & change better than Taylor's offer of $4.12!

[BigCat]

Quietly someone snagged 4,100 shares @ 3.05.

[BigCat]

3.05 Gone.... 3.08 x 3.15.

[BigCat]

I noticed this today in SBJ.
http://www.bizjournals.com/sanfrancisco/blog/2014/10/fnb-bancorp-ceo-bank-mergers-mechanics-bank-marin.html?page=all

[BigCat]

Large Valley Community Investor Objects to Calif. Bank's Sale
BY PAUL DAVIS
OCT 3, 2014 5:04PM ET

Valley Community Bank's biggest shareholder has gone public with his objection to the Pleasanton, Calif., bank's sale to FNB Bancorp in San Francisco.
Stephen Taylor, chairman of Taylor Asset Management in Chicago, called the deal "grossly unfair" to the $139 million-asset Valley's investors. Taylor took aim in a press release Friday at the deal's valuation — roughly half of the seller's book value — and $500,000 in payments to officers and insiders.
"This board may have put their own interests ahead of shareholders," Taylor said. "We must vote down this deal and replace the board if necessary… and if we choose to sell, we should conduct an appropriate process focused on maximizing shareholder value."
Taylor said in an interview that he hopes to rally shareholders to object to the deal at an Oct. 23 fairness hearing called by the California Commissioner of Business Oversight. "Should it come to a shareholder vote, I believe it may be difficult for Valley Community to secure the 2/3 vote of outstanding shares to approve" the sale, he added.
Taylor also said an outside party he had hired to analyze the deal determined that "the value should be much higher." Taylor declined to identify the firm, but a source familiar with the matter said it was Tier One Partners.
FNB, the holding company for the $901 million-asset First National Bank of Northern California, agreed to buy Valley Community in May for $6.2 million. FNB also plans to redeem the 5,775 shares of preferred stock Valley issued to the Treasury Department as part of the Troubled Asset Relief Program for $4.3 million. The preferred stock was sold in an auction last fall.
FNB disclosed in Sept. 30 regulatory filing that it insisted, as part of the deal, that Valley Community cancel the change-in-control benefits and terminate the employment of three executives, including President and Chief Executive Richard Loupe. Valley Community also entered into non-solicitation and confidentiality agreements with the executives. In exchange, Valley Community agreed to pay them a total of $500,800 after the deal's completion, including $210,000 to Loupe.
Valley Community disclosed last month that an unnamed investor with a 9.8% stake had requested a list of its other registered shareholders. Loupe wrote in a Sept. 2 letter to shareholders that Valley Community had provided the shareholder with the list.
"This shareholder has also expressed to our board … his opposition to the merger," Loupe wrote, adding that the bank's directors had met to consider the objections. At that meeting, directors "found that the proposed merger … remains in the best interest of Valley Community Bank and its shareholders."
Calls to Loupe and Taylor were not immediately returned.

[BigCat]

Sweet, good to see it getting a bit of attention. A little bit of volume to the bottom side today... Ask slipped downward with it. Seems like a no brainer here with all the talk of buyouts and offers well above the current $2.75 PPS.

[56Chevy]

VCBC gaining attention from American Banker

Large Valley Community Investor Objects to Calif. Bank's Sale

by Paul Davis

OCT 3, 2014 5:04pm ET

Valley Community Bank's biggest shareholder has gone public with his objection to the Pleasanton, Calif., bank's sale to FNB Bancorp in San Francisco.

http://www.americanbanker.com/issues/179_192/large-valley-community-investor-objects-to-calif-banks-sale-1070369-1.html

*requires subscription to read full article...but the jist of the story is there.

[BigCat]

Just read it. I like what I'm hearing.

I'm tempted to beat down that ask!

[56Chevy]

Valley Community Shareholder Urges NO Vote on Sale to FNB

Date : 10/03/2014 @ 1:52PM
Source : PR Newswire (US)
Stock : Valley Community Bank (pleasanton, Ca) (QB) (VCBC)
Quote : $2.75 0.0 (0.00%) @ 11:01AM

CHICAGO, Oct. 3, 2014 /PRNewswire/ -- The largest shareholder of Valley Community Bank (Symbol: VCBC) voiced his opposition to the bank's Board of Directors decision to sell the bank to FNB Corp. Stephen Taylor, Chairman of Taylor Asset Management, Inc., a Chicago-based firm whose fund has investments in other California-based community banks, believes the bank is dramatically undervalued.

"Selling at roughly half of book value coupled with giving over $500,000 in cash payments to its current officers and insiders is grossly unfair to their shareholders," said Taylor. "This board may have put their own interests ahead of shareholders. I even commissioned a third party analysis that concurs that the value should be much higher."

"We must vote down this deal and replace the board if necessary," said Taylor. "And if we choose to sell, we should conduct an appropriate process focused on maximizing shareholder value."

Shareholders may contact Mr. Taylor at 310-275-7947 or via email at [e-mail].

http://ih.advfn.com/p.php?pid=nmona&article=63919938

*The choices are clear now. Taylor's offer: $4.12 @ share

[56Chevy]

Why 40%? IRS rules significantly limit the usage of net operating losses when a change of ownership occurs above 50%.

In order for the bank to fully utilize their NOL's (now in the form of deferred tax assets) in the future Mr. Taylor's ownership could not exceed 50%.

He already has 9.8% and with 40% more that would take his ownership to 49.8% ...which is as close to the 50% as he can go without diminishing those valuable DTA's.

This bank has turned the corner on profits. DTA's will play a major role in adding to the positive earnings for shareholders going forward.

This is the wrong time to sell this bank for what amounts to peanuts!