California-based lender BayCom has agreed to buy Colorado-based peer TIG Bancorp in a cash-stock deal worth around $39.4m.

The deal marks BayCom’s foray into Colorado.

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Under the agreement, TIG will merge with BayCom.

At the same time, TIG subsidiary First State Bank of Colorado will merge with BayCom subsidiary United Business Bank (UBB).

The merged entity will manage around $2bn in assets.

UBB will have 20 California branches, two in Washington, six in New Mexico and seven Colorado branches after the merger.

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BayCom expects the deal to be “accretive to earnings (before merger costs) in the first year of combined operations and accretive to tangible book value in approximately three years”.

As per the agreed terms, TIG shareholders will secure $6.34 in cash and 0.27543 of a share of BayCom stock for each share held.

The deal is expected to complete in the final quarter of this year.

It already secured the green light from the companies’ boards and is now pending shareholder and regulatory approvals.

BayCom president and CEO George Guarini said: “From a strategic perspective, we think First State Bank of Colorado is a great fit.

“The merger will provide United Business Bank with a significant presence in Colorado, including entry into the attractive Denver and Colorado Springs markets.”