WAYNE, N.J., July 26, 2017 /PRNewswire/ -- In a merger of
two banks with a similar focus on personal service and community
involvement, Valley National Bancorp ("Valley") (NYSE: VLY) announced today
that it is expanding its Florida
presence and moving into Alabama
by acquiring USAmeriBancorp, Inc. ("USAB") (OTC Pink:
USAB).
The companies have entered into a merger agreement in which the
common shareholders of USAB will receive 6.1 shares of Valley
common stock for each USAB share they own, subject to adjustment in
the event Valley's volume-weighted
average stock price falls below $11.50 or rises above $13.00 prior to closing. The transaction is
valued at an estimated $816 million,
based on Valley's closing stock
price on July 25, 2017.
Valley, and its wholly-own
subsidiary, Valley National Bank, has approximately $23.4 billion in assets, $17.8 billion in loans, $17.3 billion in deposits and 209 branches in
New Jersey, New York and Florida.
USAB, and its wholly-owned subsidiary, USAmeriBank,
headquartered in Clearwater,
Florida, has approximately $4.4
billion in assets, $3.6
billion in loans, $3.5 billion
in deposits, and maintains a branch network of 30 offices.
The acquisition represents a significant addition to
Valley's Florida franchise, and will meaningfully
enhance its presence in the Tampa
Bay market, which is Florida's second largest metropolitan area by
population. The acquisition will also bring Valley to the Birmingham, Montgomery, and Tallapoosa areas in Alabama, where USAmeriBank maintains 15
offices contributing approximately $1.1
billion of deposits and $520
million in loans.
Gerald H. Lipkin, Chairman &
CEO commented that, "This will be our third acquisition in
Florida since 2014 and is
consistent with our goal to expand our franchise in the high growth
markets of Florida. USAB has a strong record of profitability
and growth. We are excited about our collaboration with
Joseph V. Chillura, CEO of USAB, who
will join Valley as a key member
of our executive team."
Valley has consistently
prioritized the retention of key individuals from acquisitions in
order to service key clients of an acquired bank and remains
committed to this effort. Key leaders from USAB's team will
join Valley to help drive
continued growth efforts in the Florida and Alabama markets. Additionally, USAB
Chairman Jennifer W. Steans is
expected to join Valley's board of
directors.
"We are fortunate to have found a partner that shares the same
quality corporate culture and focus on personal service as
USAmeriBank," said Jennifer Steans,
Chairman of the Board of USAmeriBancorp. "Valley is a strong regional bank focused on
helping its customers succeed, so this is a win-win for our
employees, customers, and shareholders."
"We are excited to join the Valley team," said Joseph V. Chillura, CEO of USAmeriBancorp, who
will stay on as Regional President of the Florida West Coast
(Tampa to Naples) and Alabama Division after the merger
is complete. "Together we will be better able to serve, and
expand, our customer relationships in the Tampa Bay and central Alabama areas. Valley has demonstrated
professionalism throughout this process, and has remained focused
on continuity. We are extremely proud of everyone at
USAmeriBank for building a terrific bank and I am convinced this
partnership will significantly benefit our stakeholders, banking
customers and the communities we serve."
Valley anticipates that the
merger with USAB, which will involve changing USAmeriBank's name to
Valley National Bank in its Florida and Alabama locations, will be a non-taxable
transaction. The combined company is expected to have
approximately $28 billion in assets,
$21 billion in loans, $21 billion in deposits, and 239 branches across
New Jersey, New York, Florida, and Alabama.
The Boards of Directors of both companies, after extensive
review and due diligence, have unanimously approved the
transaction. The acquisition is expected to close early in
the first quarter of 2018, subject to standard regulatory
approvals, shareholder approvals from Valley and USAB, as well as other customary
conditions.
In connection with this announcement, Valley has commenced a preferred stock
offering of approximately $75
million. Inclusive of this offering, Valley anticipates this transaction will be
accretive to Valley's per share
earnings within 12 months from closing.
Combination of Strong and Well-Capitalized Banks
The transaction with USAB has similar characteristics to prior
whole-bank acquisitions undertaken by Valley. Valley has a track record of integrating
mergers designed to minimize customer disruption, and deliver
profitable growth while maintaining strong credit quality and a
well-capitalized balance sheet. Selected data for the
combined entity, on a pro-forma basis as of June 30, 2017, include:
- Approximately $28 billion in
assets
- Nearly $21 billion in loans
- 239 branches, including 140 in northern and central
New Jersey, 38 in Manhattan, Brooklyn, Queens and Long
Island, 46 in Florida, and
15 in Alabama
- All regulatory capital ratios will be above the fully phased in
Basel III minimum levels including the capital conservation
buffer.
Transaction Summary
Under the terms of the definitive agreement signed by the
companies, each USAB shareholder will receive 6.1 shares of Valley
common stock for each share of USAB common stock if Valley's volume-weighted average closing price
during the 30 day trading ending 5 days prior to closing is between
$11.50 and $13.00. In the event
that the volume-weighted average closing price is less than
$11.50, then the exchange ratio shall
be $69.00 divided by the
volume-weighted average closing price. If Valley's
volume-weighted average closing price is greater than $13.00, then the exchange ratio shall be
$79.30 divided by the volume-weighted
average closing price. Both Valley and USAB have walkaway
rights if the volume-weighted average closing price is below
$11.00 and USAB has a walkaway right
if the volume-weighted average closing price is above $13.50.
Following are selected terms and metrics associated with the
transaction based upon current projections, including the impact of
the proposed preferred stock offering:
- Purchase price represents a fixed 6.1x for 1 exchange ratio
(subject to adjustment)
- Total transaction value of approximately $816 million
- Price to LTM EPS of 16.4x
- Price to 2018 EPS + Cost Savings of 11.4x
- Price to tangible book value of 2.38x
- Tangible book value dilution of 5.5% with an earn-back period
of approximately 4.7 years
- Anticipated to be accretive to earnings in 2018, including
preferred stock issuance
- Core deposit premium of 18.2%
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the
preferred stock in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction. Any offering of the preferred stock is being made
only by means of a written prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended.
Valley was advised by Keefe,
Bruyette & Woods, Inc., a Stifel Company, MG Advisors, Inc. and
the law firm of Day Pitney LLP. USAB was advised by the
investment banking firm of Sandler O'Neill + Partners, L.P., Hovde
Group, LLC and the law firm of Barack
Ferrazzano Kirschbaum & Nagelberg LLP.
Investor Conference Call
Executives from Valley and USAB
will host a conference call with investors and the financial
community at 10:00 AM Eastern Standard
Time, today to discuss this transaction. Those wishing
to participate in the call may dial toll-free (800) 230-1766.
Investor presentation materials on this transaction will be made
available prior to the conference call at
www.valleynationalbank.com.
About Valley
Valley National Bancorp is a regional bank holding company
headquartered in Wayne, New Jersey with
approximately $23 billion in assets. Its principal
subsidiary, Valley National Bank, currently operates over 200
branch locations in northern and central New Jersey,
the New York City boroughs
of Manhattan, Brooklyn, Queens and Long
Island, and Florida. Valley National Bank is one of
the largest commercial banks headquartered in New
Jersey with executive offices
in Manhattan and West Palm Beach. Helping
communities grow and prosper is the heart of Valley's corporate citizenship philosophy. For
more information about Valley National Bank and its
products and services, please visit a convenient branch
location, www.valleynationalbank.com or call our Customer
Service Team at 800-522-4100.
About USAmeriBank
USAmeriBank is an independent, non-public bank based in
Clearwater, Florida, that has
established itself as an outstanding middle-market financial
institution. The bank serves the needs of individuals and
businesses in the Tampa Bay area
in Florida, and in the
Birmingham, Montgomery and Tallapoosa areas in Alabama, by providing a high-level of
personalized service and attention to a targeted customer base.
USAmeriBank's parent company is USAmeriBancorp, Inc. More
information is available at www.USAmeriBank.com.
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. In connection with the proposed merger,
Valley intends to file a joint
proxy statement/prospectus with the Securities and Exchange
Commission. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE
JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE
IT WILL CONTAIN IMPORTANT INFORMATION. Investors and security
holders may obtain a free copy of the registration statement (when
available) and other documents filed by Valley with the Commission at the Commission's
website at www.sec.gov. These documents may be accessed and
downloaded for free at Valley's
website at http://www.valleynationalbank.com/filings.html or by
directing a request to Dianne M.
Grenz, Senior Executive Vice President, Valley National
Bancorp, at 1455 Valley Road, Wayne, New
Jersey 07470, telephone (973) 305-3380.
Participants in the Solicitation
This communication is not a solicitation of a proxy from any
security holder of Valley or USAB.
However, Valley, USAB, their
respective directors and executive officers and other persons may
be deemed to be participants in the solicitation of proxies from
USAB's shareholders in respect of the proposed transaction.
Information regarding the directors and executive officers of
Valley may be found in its
definitive proxy statement relating to its 2017 Annual Meeting of
Shareholders, which was filed with the Commission on March 17, 2017 and can be obtained free of charge
from Valley's website. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the joint
proxy statement/prospectus and other relevant materials to be filed
with the SEC when they become available.
Forward Looking Statements
The foregoing contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of
1995. Such statements are not historical facts and include
expressions about management's confidence and strategies and
management's expectations about new and existing programs and
products, relationships, opportunities, taxation, technology and
market conditions. These statements may be identified by such
forward-looking terminology as "expect," "believe," "view,"
"opportunity," "allow," "continues," "reflects," "typically,"
"usually," "anticipate," or similar statements or variations of
such terms. Such forward-looking statements involve certain
risks and uncertainties. Actual results may differ materially from
such forward-looking statements. Factors that may cause actual
results to differ from those contemplated by such forward-looking
statements include, but are not limited to, the following: failure
to obtain shareholder or regulatory approval for the merger of USAB
with Valley or to satisfy other
conditions to the merger on the proposed terms and within the
proposed timeframe; delays in closing the merger; the inability to
realize expected cost savings and synergies from the merger of USAB
with Valley in the amounts or in
the timeframe anticipated; changes in the estimate of non-recurring
charges; the diversion of management's time on issues relating to
the merger; costs or difficulties relating to integration matters
might be greater than expected; material adverse changes in
Valley's or USAB's operations or
earnings; an increase or decrease in the stock price of
Valley during the 30 day pricing
period prior to the closing of the merger which could cause an
adjustment to the exchange ratio or give either Valley or USAB the right to terminate the
merger agreement under certain circumstances; the inability to
retain USAB's customers and employees; or weakness or a decline in
the economy, mainly in New Jersey,
New York, Florida, and Alabama, as well as the risk factors set forth
in Valley's Annual Report on Form
10-K for the year ended December 31,
2016. Valley assumes no
obligation for updating any such forward-looking statement at any
time.
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SOURCE Valley National Bancorp