Frontier Financial Corporation (NASDAQ: FTBK) ("Frontier") and SP
Acquisition Holdings, Inc. (NYSE Amex: DSP) ("SPAH") today jointly
announced that they have entered into an Agreement and Plan of
Merger, pursuant to which Frontier will merge with, and into, SPAH.
The merger is expected to close in the fourth quarter of 2009.
Frontier is a Washington-based bank holding company, with
approximately $4.0 billion in assets. Frontier Bank offers a wide
range of banking and financial services to businesses and
individuals in its market area. SPAH is a special purpose
acquisition company with nearly $429 million in assets held in a
trust account for the benefit of its shareholders, and which may be
used in connection with a business combination.
Under the terms of the merger agreement, each share of
Frontier's common stock outstanding will be exchanged for the right
to receive 0.0530 shares of SPAH common stock and 0.0530 SPAH
warrants upon completion of the merger. Frontier currently has
47,131,853 shares of common stock issued and outstanding, which
will be exchanged for approximately 2.5 million shares of common
stock of SPAH and approximately 2.5 million warrants of SPAH, in
the aggregate. Such warrants will have an exercise price of $11.50
per share and exercisable for seven years. The closing price SPAH
common stock on the NYSE AMEX on July 30, 2009 was $9.75 per share.
The stock and warrants received will be listed on a national stock
exchange.
As part of the merger, SP Acq LLC and certain directors of SPAH
will forfeit 9,453,412 shares of common stock of SPAH. In addition,
SPAH will seek approval of its warrantholders to approve an
amendment to its existing warrants to increase the exercise price
of such warrants to $11.50 per share and extend the expiration date
to seven years from the date of the business combination.
Following the completion of the merger, the recapitalized
Frontier is expected to be well-positioned to offer new loans and
expanded banking services to its customers and to be able to make
significant progress on its previously announced business banking
plan with a focus on relationship banking and cultivating core
deposits within its existing market. In addition, the transaction
will result in a strong capital position that should allow Frontier
to take advantage of attractive growth opportunities available in
today's dislocated market.
For Frontier's customers, employees and the communities that it
serves, there will be little evidence of a change after the merger.
SPAH will do business as Frontier Financial Corporation. Frontier's
executive team will remain in place, the company's headquarters
will remain in Everett, Washington, and the Frontier Bank brand
will not be changed. The boards of the new holding company and bank
will consist of both new members representing SPAH shareholders and
current Frontier directors to provide for ongoing community
engagement and business continuity. Frontier will continue to be an
active member of the communities in which it operates.
Warren Lichtenstein, Chairman and CEO of SPAH, commented, "It is
exciting to bring this attractive transaction to our shareholders.
With the capital resources of SPAH and the strength of Frontier's
existing core franchise we believe the opportunities will be
significant for our shareholders going forward. In addition to
creating a strong growth platform, the invested capital will
provide Frontier Bank with valuable flexibility as it relates to
managing its existing non-performing loan portfolio and realizing
maximum value for each credit. This opportunity is attractive when
considered amidst the backdrop of today's historically low bank
stock valuations and the opportunity for improved valuation in the
future."
Pat Fahey, Chairman and CEO of Frontier, remarked, "Our team has
worked tremendously hard in the last year despite unrelenting
headwinds. It is a testament to our dedicated employees, the trust
of our valued customers and the support of our communities that we
are able to announce a transaction today. Frontier shareholders
will have the opportunity to benefit in the combined organization
and our customers, employees and communities should continue to
experience all that was successful about Frontier Bank. I am
personally excited to help lead our business banking efforts and
believe this market is ripe with opportunities. The additional
capital will put us in a very strong competitive position to win
attractive customers going forward."
The transaction is subject to the approval of Frontier
shareholders, SPAH shareholders and warrantholders and several
regulatory agencies, and other customary closing conditions.
Frontier and SPAH expect to file a first draft joint proxy
statement/prospectus with the SEC in the coming week with further
details about the transaction including risk factors, background
and pro forma financial statements.
Conference Call Information
Frontier and SPAH will host a conference call for investors,
analysts and other interested parties on Monday, August 3, at 11:00
a.m. PDT (2:00 p.m. EDT). The conference call will be hosted by
Warren Lichtenstein, Chairman and CEO of SPAH and Pat Fahey,
Chairman and CEO of Frontier Financial Corporation. Investors,
analysts and other interested parties may access the teleconference
at (888) 359-3613 using access code 9067524. Shortly after the call
concludes, the replay will also be available at (888) 203-1112
using access code 9067524, where it will be archived until August
17, 2009. A webcast of the call can be accessed at
www.frontierbank.com.
About Frontier Financial Corporation
Frontier Financial Corporation is a Washington-based financial
holding company, providing financial services through its
commercial bank subsidiary, Frontier Bank, since 1978. Frontier
Bank offers a wide range of banking and financial services to
businesses and individuals in its market area, including trust,
cash management, and investment and insurance products. Frontier
operates 48 offices in Clallam, Jefferson, King, Kitsap, Pierce,
Skagit, Snohomish, Thurston, Whatcom counties in Washington and 3
offices in Oregon. Additional information regarding Frontier Bank
and its services can be found at the bank's website:
www.frontierbank.com.
About SP Acquisition Holdings
SP Acquisition Holdings is a blank check company organized under
the laws of the State of Delaware on February 14, 2006. It was
formed for the purpose of acquiring, through a merger, capital
stock exchange, asset acquisition or other similar business
combination, one or more businesses or assets.
Additional Information and Where to Find It
Frontier and SPAH intend to file with the Securities and
Exchange Commission (the "SEC") a joint registration statement on
Form S-4, and expect to mail a proxy statement/prospectus to their
security holders, containing information about the transaction.
Investors and security holders of Frontier and SPAH are urged to
read the proxy statement/prospectus and other relevant materials
when they become available because they will contain important
information about Frontier, SPAH and the proposed merger. In
addition to the registration statement to be filed by Frontier and
SPAH, the proxy statement/prospectus will be mailed to the security
holders of SPAH. Frontier and SPAH file annual, quarterly and
current reports, proxy statements and other information with the
SEC. Investors and security holders may obtain a free copy of the
proxy statement/prospectus and other relevant documents (when they
become available) and any other documents filed with the SEC at its
website at www.sec.gov. These documents may also be obtained free
of charge from Frontier by requesting them in writing at Frontier
Financial Corporation, 332 SW Everett Mall Way, Everett, Washington
98204, or by telephone at (425) 514-0700. In addition, investors
and security holders may access copies of the documents filed with
the SEC by Frontier on its website at www.frontierbank.com. The
documents filed by SPAH may also be obtained by requesting them in
writing to SPAH at SP Acquisition Holdings, Inc., 590 Madison
Avenue, 32nd Floor, New York, New York, 10022, or by telephone at
(212) 520-2300.
Forward-Looking Statements
This press release contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995 ("PSLRA"). This statement is included for the express
purpose of availing Frontier of the protections of the safe harbor
provisions of the PSLRA. The forward-looking statements contained
herein are subject to factors, risks and uncertainties that may
cause actual results to differ materially from those projected. The
following items are among the factors that could cause actual
results to differ materially from the forward-looking statements:
general economic conditions, including their impact on capital
expenditures; business conditions in the banking industry; recent
world events and their impact on interest rates, businesses and
customers; the regulatory environment; new legislation; pending
regulatory actions; employee retention factors; rapidly changing
technology and evolving banking industry standards; competitive
factors, including increased competition with community, regional
and national financial institutions; fluctuating interest rates;
higher than expected loan losses; and similar matters. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management\'s analysis only at the date
of this release. Frontier and SPAH undertake no obligation to
publicly revise or update these forward-looking statements to
reflect events or circumstances that arise after the date of this
release. Readers should carefully review the risk factors described
in this and other documents Frontier files from time to time with
the Securities and Exchange Commission, including Frontier's and
SPAH's 2008 Form 10-Ks.
Media Contacts: Frontier Pat Fahey (425) 423-7250 SPAH Jason
Booth (310) 941-3616
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