TriCo Bancshares (“TriCo”) (NASDAQ:TCBK) and FNB Bancorp (“FNB”)
(NASDAQ:FNBG) today announced that they have entered into a
definitive agreement under which TriCo, parent company of Tri
Counties Bank, will acquire FNB, parent company of First National
Bank of Northern California (“FNB NorCal”), in a stock transaction
valued at approximately $315.3 million in aggregate, or $40.81 per
share based on the closing price of TriCo’s common stock of $41.64
per share on December 8, 2017. The transaction extends Tri Counties
Bank’s meaningful presence throughout Northern California into the
San Francisco peninsula adding key growth markets and opportunities
to serve customers in and around the Bay Area. The combination
provides customers on the peninsula with access to a premier
community banking franchise committed to the businesses, consumers
and the communities it serves.
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TriCo is headquartered in Chico, CA, with $4.7 billion in total
assets, $2.9 billion in gross loans, and $3.9 billion in deposits
as of September 30, 2017. Tri Counties Bank was founded in 1975 and
has 66 branch locations throughout Northern and Central
California.
FNB is headquartered in South San Francisco, CA, with $1.3
billion in total assets, $0.8 billion in gross loans, and $1.0
billion in deposits as of September 30, 2017. FNB NorCal was
founded in 1963 and has 12 branches located across the San
Francisco Peninsula.
Based on financial information as of September 30, 2017,
the combined company will have approximately $6.1
billion in assets, $5.0 billion in
deposits, $3.7 billion in gross loans, and 78 branches
throughout California -- spanning
from Bakersfield in the south to near the Oregon
border in the north. The transaction, which was unanimously
approved by the Boards of Directors of TriCo and FNB, is subject to
approval by the shareholders of both companies and federal and
California banking regulatory agencies.
Richard P. Smith, President &
CEO, TriCo commented, “We are thrilled
FNB NorCal has agreed to join with Tri Counties Bank, strengthening
and growing our position as the premier Northern California
community bank. We admire FNB NorCal’s over 50 year commitment to
the Bay Area and believe they are the ideal partner to enable us to
enter the market. We strongly believe that the Bay Area will
benefit from our full service community banking approach that
combines contemporary products and services with personal service
and community engagement. The transaction will strengthen the TriCo
franchise and provide us with improved growth opportunities,
greater earnings power, and the meaningful operational scale of an
over $6 billion asset bank.”
Mr. Smith continued, “TriCo has a proven record of
successful acquisitions, having most recently completed the
integration of North Valley Bancorp and branches purchased on the
North Coast from Bank of America in 2016. We are excited to welcome
the FNB employees and customers and are prepared for a smooth
transition process.”
Thomas McGraw, CEO, FNB commented, “We have been impressed
by TriCo and the cultural similarities with FNB. Strategically,
TriCo intends to grow the franchise and our customers will benefit
from becoming part of a larger banking franchise with an expanded
array of products and services. I am confident our shared community
banking philosophies and core technology platforms will ensure a
successful transition and provide exciting opportunities for our
employees and loyal customers.”
Under the terms of the merger agreement, FNB shareholders will
receive 0.980 shares of TriCo common stock in exchange for each
share of FNB common stock they hold. The exchange ratio is fixed,
subject to a trading collar. In total, FNB shareholders will own
approximately 24% of the common stock of the combined company once
the transaction is complete. The merger is expected to qualify as a
tax-free reorganization.
The merger agreement includes a trading collar that allows TriCo
to terminate the merger agreement if the weighted average price of
TriCo common stock, determined in accordance with the merger
agreement, exceeds $49.78 and outperforms the KBW Regional Banking
Index by more than 20%, unless FNB agrees to reduce the exchange
ratio. Conversely, FNB has the right to terminate the merger
agreement if the weighted average price of TriCo common stock is
less than $33.18 and underperforms the KBW Regional Banking Index
by more than 20%, unless TriCo agrees to increase the exchange
ratio.
The merger agreement provides for two directors of FNB to join
TriCo’s Board of Directors.
TriCo expects the transaction to be 2% accretive to earnings in
2018 (excluding transaction costs) and 8% accretive to earnings in
2019. The earnings per share accretion estimates are based on
estimated cost savings of approximately 28% of FNB’s non-interest
expense, with an estimated 75% realized in 2018 and 100% phased-in
during 2019. The earnings per share accretion estimates do not
include any impact due to potential revenue synergies although
opportunities have been identified. TriCo is expected to recover
the tangible book value dilution resulting from this transaction in
4.7 years via the crossover method.
Please see the section below titled “Investor Presentation” to
access further details regarding the pro forma assumptions and
anticipated financial merits of the transaction along with other
information about the merger.
TriCo was advised in this transaction by Stephens Inc., as
financial advisor and Sheppard, Mullin, Richter & Hampton
LLP, as legal counsel. FNB was advised by The Courtney Group,
as financial advisor and Dodd Mason George LLP, as legal
counsel.
Investor Presentation
An investor presentation has also been created for this
announcement and can be accessed at TriCo’s and FNB’s respective
websites:
-
TriCo: https://www.tcbk.com/investor-relations
-
FNB: https://www.fnbnorcal.com/investor-relations-overview
About TriCo
Established in 1975, Tri Counties Bank is a wholly-owned
subsidiary of TriCo Bancshares (NASDAQ: TCBK) headquartered in
Chico, CA, providing a unique brand of customer Service with
Solutions available in traditional stand-alone and in-store bank
branches in communities throughout Northern and Central California.
Tri Counties Bank provides an extensive and competitive breadth of
consumer, small business and commercial banking financial services,
along with access to over 25,000 nationwide surcharge free ATMs,
advanced online and mobile banking and telephone access to bankers
7 days per week. Brokerage services are provided by the bank’s
investment services through affiliation with Raymond James
Financial Services, Inc. Visit www.TriCountiesBank.com to learn
more.
About FNB
FNB Bancorp is a bank holding company registered under the Bank
Holding Company Act of 1956, as amended. As a bank holding company,
the Company is authorized to engage in the activities permitted
under the Bank Holding Company Act of 1956, as amended, and
regulations there under. Our principle office is located at 975 El
Camino Real, South San Francisco, CA, 94080, and our telephone
number is (650) 588-6800. Visit the Company's website address
at www.fnbnorcal.com for more information.
Important Additional Information About the Merger:
This communication is being made in respect of the proposed
merger transaction between TriCo and FNB. TriCo intends to file a
registration statement on Form S-4 with the SEC, which will include
a joint proxy statement of TriCo and FNB and a prospectus of TriCo,
and each party will file other documents regarding the proposed
transaction with the SEC. A definitive joint proxy
statement/prospectus will also be sent to the TriCo and FNB
shareholders seeking any required shareholder approvals. Before
making any voting or investment decision, investors and security
holders of TriCo and FNB are urged to carefully read the entire
registration statement and joint proxy statement/prospectus, when
they become available, as well as any amendments or supplements to
these documents, because they will contain important information
about the proposed transaction. The documents filed by TriCo
and FNB with the SEC may be obtained free of charge at the SEC’s
website at www.sec.gov. In addition, the documents filed by TriCo
may be obtained free of charge at TriCo’s website at
https://www.tcbk.com/investor-relations and the documents filed by
FNB may be obtained free of charge at FNB’s website at
https://www.fnbnorcal.com/investor-relations-overview.
Alternatively, these documents, when available, can be obtained
free of charge from TriCo upon written request to TriCo Bancorp,
Attention: Craig Compton, Secretary, 63 Constitution Drive, Chico,
CA 95973 or by calling (800) 922-8742 or from FNB upon written
request to FNB Bancorp, 975 El Camino Real, South San Francisco,
CA, 94080, Attention: Corporate Secretary, or by calling (650)
588-6800.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities nor shall there be any
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction. This
communication is also not a solicitation of any vote in any
jurisdiction pursuant to the proposed transactions or otherwise. No
offer of securities or solicitation will be made except by means of
a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended. The communication is not a
substitute for the joint proxy statement/prospectus that TriCo and
FNB will file with the SEC.
Cautionary Statements Regarding Forward-Looking
Information
Certain statements contained in this communication which are not
statements of historical fact constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements include, but are not limited to, certain
plans, expectations, goals, projections and benefits relating to
the merger transaction between TriCo and FNB, which are subject to
numerous assumptions, risks and uncertainties. Words such as
‘‘believes,’’ ‘‘anticipates,’’ “likely,” “expected,” “estimated,”
‘‘intends’’ and other similar expressions are intended to identify
forward-looking statements but are not the exclusive means of
identifying such statements. Please refer to each of TriCo’s and
FNB’s Annual Reports on Form 10-K for the year ended December 31,
2016, as well as their other filings with the SEC, for a more
detailed discussion of risks, uncertainties and factors that could
cause actual results to differ from those discussed in the
forward-looking statements.
Forward-looking statements are not historical facts but instead
express only management’s beliefs regarding future results or
events, many of which, by their nature, are inherently uncertain
and outside of the management’s control. It is possible that actual
results and outcomes may differ, possibly materially, from the
anticipated results or outcomes indicated in these forward-looking
statements. In addition to factors previously disclosed in reports
filed by TriCo and FNB with the SEC, risks and uncertainties for
TriCo, FNB and the combined company include, but are not limited
to: the possibility that any of the anticipated benefits of the
proposed merger will not be realized or will not be realized within
the expected time period; the risk that integration of FNB’s
operations with those of TriCo will be materially delayed or will
be more costly or difficult than expected; the inability to
complete the merger in a timely manner; the inability to complete
the merger due to the failure of TriCo’s or FNB’s shareholders to
adopt the merger agreement; diversion of management’s attention
from ongoing business operations and opportunities; the failure to
satisfy any conditions to completion of the merger, including
receipt of required regulatory and other approvals; the failure of
the proposed merger to close for any other reason; the challenges
of integrating and retaining key employees; the effect of the
announcement of the merger on TriCo’s, FNB’s or the combined
company’s respective customer relationships and operating results;
the possibility that the merger may be more expensive to complete
than anticipated or that the combined company will not achieve
anticipated earnings accretion or cost savings as a result of
unexpected factors or events; the risks of expanding into a new
market; and general competitive, economic, political and market
conditions and fluctuations. All forward-looking statements
included in this filing are made as of the date hereof and are
based on information available at the time of the filing. Except as
required by law, neither TriCo nor FNB assumes any obligation to
update any forward-looking statement.
Proxy Solicitation
TriCo, FNB, their directors, executive officers and certain
other persons may be deemed to be participants in the solicitation
of proxies from TriCo’s and FNB’s shareholders in favor of the
approval of the merger. Information about the directors and
executive officers of TriCo and their ownership of TriCo common
stock is set forth in the proxy statement for TriCo’s 2017 annual
meeting of shareholders, as previously filed with the SEC on April
17, 2017. Information about the directors and executive officers of
FNB and their ownership of FNB common stock is set forth in the
proxy statement for FNB’s 2017 annual meeting of shareholders, as
previously filed with the SEC on May 12, 2017. Shareholders may
obtain additional information regarding the interests of such
participants by reading the registration statement and the joint
proxy statement/prospectus when they become available. Free copies
of this document may be obtained as described above.
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version on businesswire.com: http://www.businesswire.com/news/home/20171211006325/en/
TriCo BancsharesRichard P. Smith, 530-898-0300President &
CEOorFNB BancorpThomas McGraw, 650-875-4865CEO
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