Investor Objects to Valley Community's Sale to FNB in California

A large shareholder at Valley Community Bank is objecting to the Pleasanton, Calif., company's sale to FNB Bancorp in South San Francisco.

An unnamed individual, who owns 9.8% of Valley Community's common stock, recently requested a list of the company's other registered shareholders, President and Chief Executive Richard Loupe wrote in a Sept. 2 letter to investors. Valley Community provided the shareholder with the list.

"This shareholder has also expressed to our board... his opposition to the merger," Loupe wrote, adding that the company's directors recently met to consider the investor's objections. At that meeting, directors "found that the proposed merger... remains in the best interest of Valley Community Bank and its shareholders."

A call to Loupe for additional comment was not immediately returned.

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 nearly 6,000 shares the $139 million-asset Valley issued to the Treasury Department as part of the Troubled Asset Relief Program. The Tarp shares were sold in an auction last fall.

The merger, which was originally expected to close by the end of this month, has already received approval from the Office of the Comptroller of the Currency. It still needs the blessing of the Federal Reserve Board and Valley Community's shareholders.