Enterprise Financial Services Corp (Nasdaq: EFSC) (the
“Company,” “EFSC,” or “Enterprise”), the holding company of
Enterprise Bank & Trust (“EB&T”), and First Choice Bancorp
(Nasdaq: FCBP) (“FCBP”), the holding company of First Choice Bank
(“First Choice”), announced today that EFSC, EB&T, FCBP and
First Choice have entered into a definitive merger agreement
pursuant to which EFSC will acquire, in an all-stock merger, FCBP.
Under the terms of the merger agreement, FCBP will merge with and
into EFSC, and First Choice will subsequently merge with and into
EB&T (with Enterprise and EB&T as the surviving entities)
in a transaction valued at approximately $397.7 million, or $33.40
per FCBP share, based on the closing price of EFSC’s common stock
on April 23, 2021. On a pro forma consolidated basis, the combined
company would have approximately $12.7 billion in consolidated
total assets as of March 31, 2021.
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The transaction is expected to be approximately 8% accretive to
Enterprise’s 2022 earnings per share (excluding the impact of
one-time transaction expenses) after giving effect to estimated
fully phased-in transaction synergies. Estimated tangible book
value per share dilution to EFSC is expected to be earned back in
less than three years under the crossover method including CECL
“Day Two” accounting treatment. The acquisition is expected to
generate an internal rate of return of approximately 21% for
Enterprise.
Headquartered in Cerritos, California, FCBP had approximately
$2.5 billion in total assets, $2.0 billion in loans, and $1.9
billion in deposits as of March 31, 2021. First Choice is a
community-based financial institution that serves primarily
commercial and consumer clients in diverse communities and
specializes in loans to small- to medium-sized businesses and
private banking clients, commercial and industrial loans, and
commercial real estate loans. First Choice is a Preferred Small
Business Administration (SBA) Lender. First Choice conducts
business through eight full-service branches and two loan
production offices located in Los Angeles, Orange, and San Diego
Counties.
“I am thrilled to announce the transaction and our continued
expansion into the California market,” stated Jim Lally, President
and Chief Executive Officer of EFSC. “The acquisition of First
Choice strengthens our commercial banking foundation in the largest
economy in the country. I have tremendous respect for the
associates of First Choice and the company they have built since
its founding in 2005. They have successfully created a
commercially-focused community bank with a demonstrated ability to
generate organic growth. I am pleased to welcome the diverse and
experienced First Choice team to our organization.”
Robert M. Franko, President, Chief Executive Officer and
Director of FCBP added, “We are extremely excited to join forces
with Enterprise. We believe that pairing our team’s in-depth
knowledge of our local markets and communities with the more robust
financial capabilities of Enterprise will enhance our lending
capacity, products, and services. Enterprise’s stated mission of
‘Guiding people to a lifetime of financial success’ will continue
the motto of First Choice of ‘First in speed, service and
solutions.’ With the synergies of the combined organizations, we
believe this transaction will deliver significant value to both of
our shareholders, associates and the communities we serve.”
Under and subject to the terms of the definitive agreement, upon
consummation of the transaction, each holder of FCBP common stock
will receive 0.6603 shares of EFSC common stock for each FCBP
common share held and cash in lieu of fractional shares. The
transaction is intended to qualify as a tax-free reorganization for
U.S. federal income tax purposes and FCBP shareholders are not
expected to recognize gain or loss to the extent of the stock
consideration received.
Existing Enterprise shareholders will own approximately 80% of
the outstanding shares of the combined company, and FCBP
shareholders are expected to own approximately 20%.
The transaction, which has been unanimously approved by the
boards of directors of the Company, EB&T, FCBP, and First
Choice, is expected to close in the third quarter of 2021, subject
to satisfaction of customary closing conditions, including receipt
of regulatory approvals and approval of EFSC’s and FCBP’s
shareholders. Upon closing of the transaction, FCBP Founder and
Chairman of the Board, Peter Hui, will join the Enterprise board of
directors. FCBP’s directors have entered into agreements with the
Company pursuant to which they have committed to vote their shares,
which represent approximately 16% of FCBP’s issued and outstanding
common stock, in favor of the acquisition.
For additional information about the proposed acquisition,
shareholders are encouraged to carefully read the definitive
agreement that will be filed with the Securities and Exchange
Commission (“SEC”) today.
Advisors to the Transaction
Boenning & Scattergood, Inc. served as financial advisor to
EFSC and Holland & Knight LLP served as legal counsel. Keefe,
Bruyette & Woods, A Stifel Company, served as financial advisor
to FCBP and Duane Morris LLP served as legal counsel.
Conference Call and Investor Presentation
The Company will host a conference call and webcast at 10:00
a.m. Central Time on April 27, 2021 to discuss the transaction and
related matters. This press release as well as a related slide
presentation will be accessible on the Company’s website at
enterprisebank.com under “Investor Relations” beginning prior to
the scheduled broadcast of the conference call. The call can be
accessed via this same website page, or via telephone at
1-800-353-6461 (Conference ID #2910583). A recorded replay of the
conference call will be available approximately two hours after the
call completion. Go to http://bit.ly/EFSC1Q2021earnings and
register to hear a replay of the call. The replay will be available
for approximately two weeks following the conference call.
About Enterprise Financial Services Corp
Enterprise Financial Services Corp (Nasdaq: EFSC), with
approximately $10.2 billion in assets, is a financial holding
company headquartered in Clayton, Missouri. Enterprise Bank &
Trust, a Missouri state-chartered trust company with banking powers
and a wholly-owned subsidiary of EFSC, operates 39 branch offices
in Arizona, California, Kansas, Missouri, Nevada and New Mexico,
and SBA loan and deposit production offices in Arizona, California,
Colorado, Illinois, Indiana, Massachusetts, Michigan, Nevada, Ohio,
Oregon, Texas, Utah and Washington. Enterprise Bank & Trust
offers a range of business and personal banking services and wealth
management services. Enterprise Trust, a division of Enterprise
Bank & Trust, provides financial planning, estate planning,
investment management and trust services to businesses,
individuals, institutions, retirement plans and non-profit
organizations. For more information, please visit
enterprisebank.com.
Enterprise Financial Services Corp’s common stock is traded on
the Nasdaq Stock Market under the symbol “EFSC”. Please visit our
website at www.enterprisebank.com to see our regularly posted
material information.
About First Choice Bancorp
First Choice Bancorp, headquartered in Cerritos, California, is
the bank holding company for First Choice Bank. First Choice Bank
is a community-based financial institution that serves primarily
commercial and consumer clients in diverse communities and
specializes in loans to small- to medium-sized businesses and
private banking clients, commercial and industrial loans, and
commercial real estate loans. First Choice Bank is a Preferred
Small Business Administration (SBA) Lender. First Choice Bank
conducts business through eight full-service branches and two loan
production offices located in Los Angeles, Orange, and San Diego
Counties. For more information, please visit
www.FirstChoiceBankCA.com.
Forward-Looking Statements
Certain statements contained in this press release may be
considered forward-looking statements regarding Enterprise,
including its wholly-owned subsidiary EB&T, FCBP, including its
wholly-owned subsidiary First Choice, and Enterprise’s proposed
acquisition of FCBP and First Choice. These forward-looking
statements may include: statements regarding the acquisition, the
consideration payable in connection with the acquisition, and the
ability of the parties to consummate the acquisition.
Forward-looking statements are typically identified by words such
as “believe,” “expect,” “anticipate,” “intend,” “outlook,”
“estimate,” “forecast,” “project,” “pro forma” and other similar
words and expressions. Forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over
time. Forward-looking statements speak only as of the date they are
made. Because forward-looking statements are subject to assumptions
and uncertainties, actual results or future events could differ,
possibly materially, from those that EFSC or FCBP anticipated in
their forward-looking statements and future results could differ
materially from historical performance. Factors that could cause or
contribute to such differences include, but are not limited to, the
possibility: that expected benefits of the acquisition may not
materialize in the timeframe expected or at all, or may be more
costly to achieve; that the acquisition may not be timely
completed, if at all; the occurrence of any event, change or other
circumstances that could give rise to the right of one or both of
the parties to terminate the definitive transaction agreement; the
outcome of any legal proceedings that may be instituted against
EFSC or FCBP; that prior to the completion of the acquisition or
thereafter, EFSC’s and FCBP’s respective businesses may not perform
as expected due to transaction-related uncertainty or other
factors; that the parties are unable to successfully implement
integration strategies; that required regulatory, EFSC shareholder
or FCBP shareholder or other approvals are not obtained or other
closing conditions are not satisfied in a timely manner or at all;
that adverse regulatory conditions may be imposed in connection
with regulatory approvals of the acquisition; reputational risks
and the reaction of the companies’ employees or customers to the
transaction; diversion of management time on acquisition-related
issues; that the COVID-19 pandemic, including uncertainty and
volatility in financial, commodities and other markets, and
disruptions to banking and other financial activity, could harm
Enterprise and FCBP’s business, financial position and results of
operations, and could adversely affect the timing and anticipated
benefits of the proposed acquisition; and those factors and risks
referenced from time to time in EFSC’s or FCBP’s filings with the
SEC, including in their Annual Reports on Form 10-K for the fiscal
year ended December 31, 2020, and their other filings with the SEC.
For any forward-looking statements made in this press release or in
any documents, EFSC and FCBP claim the protection of the safe
harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995.
Annualized, pro forma, projected and estimated numbers in this
document are used for illustrative purposes only, are not forecasts
and may not reflect actual results.
Except to the extent required by applicable law or regulation,
each of EFSC and FCBP disclaims any obligation to revise or
publicly release any revision or update to any of the
forward-looking statements included herein to reflect events or
circumstances that occur after the date on which such statements
were made.
Additional Information About the Acquisition and Where to
Find It
This press release 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 acquisition transaction, along
with other relevant documents, a registration statement on Form S-4
will be filed with the SEC that will include a joint proxy
statement/prospectus to be distributed to the shareholders of EFSC
and FCBP in connection with their votes on the acquisition.
Shareholders of EFSC and FCBP are urged to read the registration
statement and the joint proxy statement/prospectus regarding the
acquisition when they become available and any other relevant
documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important
information about the proposed acquisition.
The final joint proxy statement/prospectus will be mailed to
shareholders of EFSC and FCBP. Investors and security holders will
be able to obtain the documents, and any other documents EFSC has
filed with the SEC, free of charge at the SEC’s website,
www.sec.gov. In addition, documents filed with the SEC by EFSC in
connection with the proposed acquisition will be available free of
charge by (1) accessing EFSC’s website at www.enterprisebank.com
under the “Investor Relations” link, (2) writing EFSC at 150 North
Meramec, Clayton, Missouri 63105, Attention: Investor Relations,
(3) accessing FCBP’s website at
https://investors.firstchoicebankca.com under the “SEC Filings”
tab, or (4) writing FCBP at 17785 Center Court Drive, N Suite 750,
Cerritos, CA 90703, Attention: Corporate Counsel.
EFSC and FCBP and certain of their directors, executive officers
and certain other members of management and employees may be deemed
to be participants in the solicitation of proxies from the
shareholders of EFSC and FCBP in connection with the proposed
acquisition. Information about the directors and executive officers
of EFSC is set forth in the proxy statement for EFSC’s 2021 annual
meeting of shareholders, as filed with the SEC on a Schedule 14A on
March 17, 2021. Information about the directors and officers of
FCBP will be set forth in the Form-10-K/A, to be filed with the SEC
on or about April 27, 2021 and in the proxy statement of FCBP to be
filed on Schedule 14A during the third quarter of 2021. Additional
information regarding the interests of those participants and other
persons who may be deemed participants in the transaction may be
obtained by reading the joint proxy statement/prospectus regarding
the proposed acquisition when it becomes available. Free copies of
this document may be obtained as described in the preceding
paragraph.
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version on businesswire.com: https://www.businesswire.com/news/home/20210426005693/en/
Investor inquiries: Keene Turner, Executive Vice President and
Chief Financial Officer (314) 512-7233
Media inquiries: Steve Richardson, Vice President (314)
512-7183
FCBP Contact Information: Robert M. Franko, President, Chief
Executive Officer and Chief Financial Officer (562) 345-9241 Media
inquiries: Khoi D. Dang, Executive Vice President and General
Counsel (562) 263-8336
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