Mechanics Bank and California Republic Bancorp Announce Strategic Merger
WALNUT CREEK, CA, AND IRVINE, CA, April 28, 2016 – Mechanics Bank (“Mechanics”) and California Republic Bancorp (“CRB”) (OTCBB: CRPB), a bank holding company for California Republic Bank, today announced that they have reached a definitive agreement to merge. The transaction has been approved by the Boards of Directors of each company. Under the terms of the agreement, CRB shareholders will receive $37.19 per share in cash.
Headquartered in Irvine, CRB is a commercial and private lending institution with approximately 500 employees and five regional commercial banking locations throughout Southern California. As of March 31, 2016, CRB had approximately $1.8 billion in total assets. CRB also operates a significant auto lending division across 14 states. The combined entity would have approximately $5.4 billion in total assets.
“We think California Republic Bank is the perfect complement for Mechanics Bank,” said Ken Russell, President and CEO of Mechanics Bank. “Mechanics Bank has plenty of capital and capacity, and CRB is an extraordinarily effective and efficient asset generator. We both are committed to a very personal and high-touch, relationship-based form of banking, and both banks fill niches that big banks can’t.”
John DeCero, President of California Republic Bancorp, commented, “We believe the future prospects of these two outstanding organizations as a combined entity are tremendous. There’s very little overlap between the two institutions and many synergies.”
Completion of the transaction is subject to customary closing conditions, including the receipt of required regulatory and shareholder approvals. The transaction is expected to close in the second half of 2016. Clients of both banks should continue to do business with their current bankers, and expect little to change as the two organizations are brought together.
Keefe, Bruyette & Woods, Inc. acted as financial advisor to CRB, and Sheppard, Mullin, Richter & Hampton LLP acted as legal advisor. Wachtell, Lipton, Rosen & Katz acted as legal advisor to Mechanics.
About Mechanics Bank
Mechanics Bank, established in 1905, is an independent, full service community bank based in Walnut Creek, California. With $3.6 billion in assets, it is the largest bank headquartered in the Bay Area’s East Bay region. Its 30 branch offices throughout Northern California provide a highly personalized relationship banking experience that includes consumer and business banking services, commercial lending, cash management services, and comprehensive trust and wealth management services.
About California Republic Bank
California Republic Bancorp is a $1.8 billion financial services company that operates as the holding company for California Republic Bank. California Republic Bank is a full-service commercial bank providing loans, deposit and cash management services to individuals, businesses, investors, and family offices. The Bank offers its clients direct access to decision makers, unparalleled responsiveness, seasoned Relationship Managers and state-of-the-art technology. The Bank has five branch offices serving Southern California, located in Newport Beach, Beverly Hills, Irvine, Westlake Village and San Diego. The Bank also operates CRB Auto, a division of the bank, which is a relationship based, indirect auto lender, which purchases auto contracts from both franchised and select independent automobile dealerships throughout 14 States—Arizona, California, Colorado, Idaho, Illinois, Iowa, Kansas, Missouri, Nevada, Oklahoma, Oregon, Texas, Utah, and Washington.
The information presented herein contains forward-looking statements giving Mechanics’ and CRB’s expectations or predictions of future financial or business performance or conditions. These 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 and neither Mechanics nor CRB assumes any duty to update forward-looking statements. Certain risks and uncertainties that could cause actual results to differ materially from forward-looking statements and historical performance include, but are not limited to, the following: ability to obtain regulatory approvals and meet other closing conditions to the merger on the expected terms and schedule; delay in closing the merger; difficulties and delays in integrating the Mechanics and CRB businesses or fully realizing cost savings and other benefits; business disruption following the proposed transaction; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; Mechanics’ and CRB’s businesses experiencing disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities; economic and capital market conditions; and the impact, extent and timing of technological changes, capital management activities, and other actions of regulatory agencies.
- Hatti Hamlin
- David Louis