(By Balaseshan) Umpqua Holdings Corp. (NASDAQ:UMPQ), a financial holding company, said it has agreed to buy California-based Circle Bancorp, parent company of Circle Bank, for about $24.9 million.
The agreement provides for cash consideration to the common shareholders of $20.4 million, or $17.75 per share. The total aggregate deal value is about $24.9 million, including the planned cash redemption of $3.5 million in preferred stock and the value of outstanding options and warrants.
Umpqua expects the acquisition to be immediately accretive to operating earnings per share with minimal impact on tangible book value per common share. The combined organization will have assets of about $11.8 billion, deposits of about $9.4 billion and shareholders' equity of about $1.7 billion.
The boards of both companies have approved the transaction, which is subject to regulatory approval and approval by the common and preferred shareholders of Circle Bancorp, as well as other customary conditions of closing.
Following entry by the companies into the agreement, Shoreline Capital Partners LP, the holder of about 99% of the outstanding shares of common stock of Circle Bancorp, delivered to Circle Bancorp its agreement to vote in favor of approving the agreement.
Upon completion of the acquisition, all Circle Bank branches will operate under the Umpqua Bank name. The acquisition will add Circle Bank's Bay Area network of six branches in Corte Madera, Novato, Petaluma, San Francisco, San Rafael and Santa Rosa to Umpqua Bank's network of 193 locations in California, Oregon, Washington and Northern Nevada.
Circle Bancorp is the parent company of Circle Bank, a full-service bank, providing a broad range of financial services to consumers and businesses. Circle Bancorp had total net assets of $306 million as of the quarter ending June 30, 2012.
UMPQ is trading down 1.18% at $12.60 on Thursday. The stock has been trading between $8.10 and $13.88 for the past 52 weeks.