Coronado First Bank, Embarcadero Bank Announce Planned Merger Under Coronado First Bank Banner
CORONADO, CA–(Marketwire – March 22, 2011) – Coronado First Bank (OTCBB: CDFB) and Embarcadero Bank announced they have signed a definitive agreement to merge the two financial institutions. The combined bank will operate under the name of Coronado First Bank, with headquarters in Coronado, CA. Embarcadero Bank accounts will eventually be consolidated into the existing Coronado branches located in Coronado and downtown San Diego.
In a joint statement Barbara DeMichele, Chairman of Coronado First, and Jerry Suppa, Chairman of Embarcadero Bank, said, “This is a win for both financial institutions and for our investors. Coronado First benefits from an infusion of at least $17 million of additional capital; Embarcadero benefits from an expanded customer base and the deposits of Coronado First. The shareholders of the combined bank will benefit from the expense savings resulting from the elimination of redundant operations, thus paving the way for greater returns on their investment.”
Both banks are relatively recent additions to San Diego area community banking, with Coronado First organized in 2005 and Embarcadero in 2006. Coronado First ended 2010 with $83 million in assets, while Embarcadero reported $73 million. If the transaction were to close today, it is anticipated that the combined bank would have total deposits in excess of $118 million and total loans in excess of $120 million. The combined bank is expected to have equity capital of approximately $25 million, which would exceed current regulatory guidelines for well-capitalized institutions by a considerable margin. The transaction requires the approval of the FDIC, the California Department of Financial Institutions, and the shareholders of both Coronado First and Embarcadero.
Terms of the agreement call for Coronado First shareholders to receive tangible book value (currently $6.70 per share), or the equivalent of approximately .67 of one share of the combined bank for each share of Coronado First stock held at the close of the transaction, based on the current tangible book value of $6.70 per share. Embarcadero’s tangible book value was $10.04 per share at year-end 2010. Each of the bank’s tangible book values will be re-determined shortly before the closing and the final merger consideration will be determined by the two tangible book values at such time Coronado First shareholders will also have the option, subject to certain limitations, to obtain a portion of the consideration in cash rather than in stock. Coronado First has 1,392,477 shares outstanding, indicating an overall transaction value of approximately $9.3 million based on its current tangible book value.
Maria P. Kunac, President and CEO of Embarcadero Bank, will be President and CEO of the combined bank. Bruce Ives, President and CEO of Coronado First Bank, will be Chief Operating Officer of the combined bank. Both will serve on the Board of Directors of the combined bank, where DeMichele will serve as Chairman.
“Combining the people, resources, and business lines of our two banks creates a stronger institution able to continue providing the private banking environment, extraordinary customer service, and competitive pricing and products that our customers have come to expect,” DeMichele said. Ms. Kunac added, “Community banks will continue to play an important role in the economic recovery of our region, with loans to small and mid-sized businesses, where much of the employment growth is anticipated. We plan to successfully compete in this market for many years to come.”
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This press release includes “forward-looking” statements as such term is defined in the Private Securities Litigation Reform Act of 1995 including the anticipated cost savings and synergies expected to be achieved as a result of the merger, the successful integration of the two banks, the equity capital of the combined bank and the potential returns on investment of shareholders. These statements are subject to risks and uncertainties and actual results could differ materially due to certain risk factors. Specific relevant risks include whether the transaction is approved by regulators and by shareholders of both banks and risk related to the successful integration of the two banks. You should not place undue reliance on forward-looking statements and we undertake no obligation to update those statements.
This press release may be deemed to be solicitation material in respect of the proposed merger of Coronado First Bank with and into Embarcadero Bank. Coronado First Bank and Embarcadero Bank intend to send their shareholders a joint proxy statement regarding the proposed merger. Before making any voting or investment decision, investors and security holders of either Coronado First Bank or Embarcadero Bank are urged to carefully read the entire proxy statement, when its becomes available, because it will contain important information about the proposed transaction.
For more information please contact:
619-522-2550
Bruce Ives
President/CEO
Coronado First Bank
619-814-1744
Maria Kunac
President/CEO
Embarcadero Bank
