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Heritage enters San Mateo county
Posted on Thursday, 11 January 2018 14:36
Heritage Commerce is taking over United American Bank in an all-scrip deal valued at USD 44.20 million, less than a month after the US Californian lender announced an agreement for Tri-Valley Bank.
The offer equates to USD 33.87 apiece, or multiples of 2.0x price to tangible book value per share; 8.0x price to last 12 months earnings; 30.3 per cent market premium; and 8.7 per cent core deposit premium.
It should lead to estimated ratios on closing of tangible common equity to tangible assets of 7.7 per cent, and total capital ratio of 13.5 per cent.
United American is a full-service commercial bank with headquarters located in San Mateo, and branches in both Redwood City and Half Moon Bay.
At 30th September 2017, the institution had USD 336.40 million in assets, USD 225.00 million in net loans and USD 303.90 million in deposits.
It provides Heritage with a physical presence in San Mateo county and improved access to San Francisco county along with growth opportunities from broader product offerings and higher lending limits.
Bank holding company ATBancorp is a majority owner with an 83.0 per cent stake and should end up with a 5.4 per cent of the entity resulting from the merger with both United American and Tri-Valley.
On a pro forma basis, this enlarged group would have had USD 3.30 billion in total assets, USD 1.90 billion in total loans, and USD 2.90 billion in total deposits, as of 30th September 2017.
Heritage entered into an agreement to acquire Tri-Valley in a USD 31.60 million all-stock exchange which is also expected to close in the second quarter of 2018.
Past purchases of other banks include Focus Business in 2015 (USD 54.81 million), Diablo Valley in 2007 (USD 69.49 million) and Western Holdings in 2000 (USD 39.40 million).
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