By Staff Report Thursday, February 20th, 2014

Heritage Oaks Bancorp’s acquisition of rival Mission Community Bank will close on Feb. 28.

Paso Robles-based Heritage Oaks made the announcement on Feb. 20. The $56 million deal will make Heritage Oaks the largest community bank in the Tri-Counties, with about $1.6 billion in assets.

Shareholders of San Luis Obispo-based Mission Community overwhelmingly approved the merger on Feb. 14.

Heritage Oaks, currently tied with Santa Barbara-based Montecito Bank & Trust as the largest lender based in the region with about $1.1 billion in total assets, has said it expects the deal to be immediately accretive to its earnings. The combined bank will have about $1.3 billion in deposits and $1 billion in loans and will operate primarily in the Tri-Counties.

Heritage Oaks said that at the merger close, all five former Mission Community branches — in San Luis Obispo, Atascadero, Paso Robles, Arroyo Grande, and Santa Maria — will remain open along with the 12 operated by Heritage Oaks. Heritage Oaks said that over time, it will consolidate 11 branches in areas where they overlap to achieve an estimated $9 million in cost savings.

The combined bank will have branches in Paso Robles, Atascadero, Templeton, San Luis Obispo, Morro Bay, Cambria, Arroyo Grande, Santa Maria and Santa Barbara and loan production offices in Goleta and Oxnard.

“The teams at both banks are working together on a consolidation and integration plan that will keep the best practices of both organizations to result in an even stronger bank that is well-equipped to provide the exceptional personal service that our customers have come to expect from both banks as well as competitive pricing and active involvement in the local community,” Heritage Oaks President and CEO Simone Lagomarsino said in a news release.

After the deal closes, Heritage Oaks’ existing shareholders are expected to own about 77 percent of the combined bank, and Mission Community shareholders will own about 23 percent.