Two San Diego banks have decided to join forces rather than go it alone.

Coronado First Bank, which completed a merger with Embarcadero Bank last year, is merging with San Diego Private Bank in a stock deal valued at $15.5 million.

Under the proposed agreement, shareholders of Coronado First, which is a publicly traded company, will pay 0.545 shares for each share of San Diego Private Bank. Pending shareholder and regulatory approval, the deal is expected to close in the first quarter of next year.

Once the transaction is completed, the new bank, which will be about $295 million in assets and have three branches, will adopt the name San Diego Private Bank. An exception to that is in Coronado, where the main office will retain the Coronado First name.

The new bank’s board will have representatives of each bank. Its chairman will be Selwyn Isakow, now the chairman and CEO of San Diego Private Bank. Its CEO will be Maria Kunac, current CEO of Coronado First Bank.

Both banks have been struggling in terms of growing organically with loan demand tepid for much of this year, but each is holding excess capital.

Coronado First reported net income of nearly $1 million for the nine months ended Sept. 30, while San Diego Private Bank did about $400,000 for the same period.

CFB had nearly 23 percent in total risk-based capital as of Sept. 30, while SD Private Bank held nearly 17 percent. To be regarded as well-capitalized, banks need 10 percent in that metric.

— Mike Allen

Editor's note: An earlier version of this story erred in describing the structure of the merger. This version corrects the error.