Wells Fargo to buy Greater Bay Bancorp
Wells Fargo & Co. said Friday that it would acquire Greater Bay Bancorp, a major regional banking firm in the San Francisco Bay Area, for about $1.5 billion in stock.
It was the second recent deal by Wells Fargo to acquire a Northern California bank. In January, Wells Fargo agreed to pay $645 million for Placer Sierra Bancshares, a 50-branch banking company based in Sacramento.
Greater Bay, based in East Palo Alto, has 41 branches and operates a sizable regional insurance agency.
The acquisition is attractive for San Francisco-based Wells Fargo because it would extend the bank’s franchise in its home territory and because Wells Fargo is interested in adding to its insurance holdings, Richard Bove, a bank analyst for New York-based Punk, Ziegel & Co., wrote in a note to investors.
Wells Fargo’s offer values Greater Bay’s stock at $28.50 a share.
On Thursday, Greater Bay postponed an earnings release that had been scheduled for that day. The move prompted market speculation about an acquisition, sending the company’s shares soaring $3.08, or 12%, to $29.54 on heavier-than-normal volume.
On Friday, after the Wells Fargo deal was announced, Greater Bay shares declined $1.61, or 5.5%, to $27.93. Wells Fargo shares climbed 8 cents to $35.92.
Wells Fargo is the largest bank based in California, with $486 billion in assets.
Greater Bay, with $7.4 billion in assets, operates under its own name and as Mid-Peninsula Bank, Bank of Petaluma, Golden Gate Bank, Coast Commercial Bank, Peninsula Bank of Commerce, Mount Diablo National Bank and Santa Clara Valley National Bank.
Its ABD Insurance & Financial Services is the nation’s 15th-largest retail insurance broker, and its Matsco Financial Corp. subsidiary is a national lender to veterinarians and dentists.
