Tucson-based Commerce Bank to merge with Scottsdale bank

Tucson-based Commerce Bank of Arizona has agreed to merge with Scottsdale’s Bank 34, creating a community bank with $1 billion in assets.

Bancorp 34 Inc., the holding company of Bank 34, and CBOA Financial Inc., the holding company of Commerce Bank of Arizona, on Friday announced the signing of a definitive merger agreement to combine and form the second largest bank headquartered in Arizona.

The merger is expected to close in the fourth quarter of 2023, subject to customary closing conditions, regulatory approvals and approvals of shareholders of each company, the companies said.

“The opportunity to combine the strengths of both management groups while capitalizing on conditions in some of the most exciting markets in the country is very compelling,” Chris Webster, CEO of Commerce Bank, said in a news release. “Together, this company will be positioned to fill a prominent role in the Southwest banking landscape, and we couldn’t be more excited to get started.”

Commerce and Bank 34 will keep their current branches and employees, and the banks will operate under a new name that has yet to be decided, said Paul Tees, Tucson market president and chief credit officer at Commerce Bank.

Founded in Tucson in 2002, Commerce Bank of Arizona has about $371 million in total assets, and five offices including three local branches and offices in Scottsdale and Gilbert.

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Founded in 1934 as a federal savings and loan in Alamogordo, New Mexico, Bank 34 has assets of $573 million and 34 locations in Scottsdale and in Alamogordo and Las Cruces, New Mexico.

Both banks are well-capitalized and carry five-star, or “superior” safety ratings from Bauer Financial, a Florida-based rating firm.

Commerce shareholders will receive 0.24 shares of Bancorp 34 common stock, which like CBOA shares are traded on the over-the-counter market, for each share of Commerce common stock, based on closing prices as of Wednesday resulting in a deal worth about $28 million overall.

Following closing, the combined company’s board of directors will be reduced to eight members, with five from the existing Bancorp 34 board.

Bancorp 34 CEO Jim Crotty will serve as the CEO of the merged company, while Webster will serve as president. Tees will serve as chief credit officer and Evan Anderson, CBOA’s chief financial officer, will be chief information officer and chief risk officer.