Fitch Ratings affirmed the long-term issuer default rating of Ontario, Calif.-based CVB Financial Corp. at BBB after the company announced that it is acquiring Pasadena, Calif.-based Community Bank in a cash-and-stock deal valued at approximately $878.3 million.
The ratings outlook for CVB Financial remains positive.
Fitch considers Community Bank's asset quality track record to be "strong" and believes that the transaction is "a good strategic fit" for CVB Financial and will enhance its franchise in Southern California.
The rating agency expects CVB Financial's earnings to improve as a result of the transaction, and expects CVB Financial's capital ratios to converge toward peers upon closing of the transaction.
