Lines of Credit
Sign up for
Mobile Remote Deposit
Friday, March 15, 2019Categories: Press Release
WALNUT CREEK, Calif. and ROSEVILLE, Calif. — March 15, 2019 — Mechanics Bank (OTCBB: MCHB) and Rabobank, N.A., a subsidiary of Rabobank Group, today announced that Mechanics Bank and Rabobank Group have entered into a definitive agreement pursuant to which Mechanics Bank will acquire Rabobank, N.A. in a strategic business combination transaction. The transaction has been approved by each party’s authorizing board of directors.
Mechanics Bank is a 114-year-old full-service community bank based in Walnut Creek, California, with 44 branches throughout California and more than $6 billion in assets. Headquartered in Roseville, California, Rabobank, N.A. is a nationally chartered bank with 100 branches and more than $13 billion in assets. The combined entity would operate under the Mechanics Bank name with 144 branches and in excess of $17 billion in total assets.
In the transaction, Mechanics will acquire Rabobank, N.A.’s retail, business banking, commercial real estate, mortgage, and wealth management businesses. Not included in the transaction are Rabobank, N.A.’s food and agribusiness assets, which with limited exceptions will transfer to Rabobank, N.A.’s affiliate, Rabo AgriFinance located in St Louis, Missouri.
Total consideration for the transaction will be approximately $2.1 billion, subject to customary purchase price adjustments at closing. As part of the total consideration payable in the transaction, Rabobank Group will receive 9.9% of the outstanding shares of Mechanics Bank after giving effect to the transaction. Currently, 79% of Mechanics Bank’s outstanding shares are owned by Ford Financial Fund II.
“Bringing Rabobank, N.A. together with Mechanics Bank gives us a great opportunity to fill an established gap between the big banks and smaller community banks throughout the state,” said John DeCero, President and CEO of Mechanics Bank. “We are two established institutions with values and principles that align closely. There’s very little geographic overlap and significant potential for value creation for both parties to this combination, and we believe that the new Mechanics Bank will be able to leverage our common strengths at a scale that will benefit all of our clients, our shareholders, and the communities we serve.”
“This is a unique opportunity to merge two high-performing consumer and commercial banks with common values and deep roots in California,” said Mark Borrecco, CEO of Rabobank, N.A. “Both organizations take pride in putting their customers first and possess a strong sense of community.”
Completion of the transaction is subject to customary closing conditions, including the receipt of required regulatory approvals. The transaction is expected to close in the third quarter of 2019. Customers of both banks should continue to do business with their current bankers, and expect little to change as the two organizations prepare to combine.
Lazard Freres & Co. LLC served as financial advisor to Rabobank, N.A., and Sullivan & Cromwell LLP served as legal advisor. Wachtell, Lipton, Rosen & Katz served as legal advisor for Mechanics Bank, and Credit Suisse Securities (USA) LLC served as financial advisor.
About Mechanics Bank
Established in 1905, Mechanics Bank is an independent, full service community bank, based in Walnut Creek, California. With more than $6 billion in assets, it is the largest bank headquartered in Northern California’s East Bay region, with 43 branch offices throughout California and one in Medford, Oregon. Mechanics Bank provides a highly personalized relationship banking experience that includes consumer and business banking services, commercial lending, cash management services, and comprehensive trust, investment and wealth management services. Mechanics Bank is a Member FDIC institution and Equal Housing Lender. More information may be found at www.mechanicsbank.com.
About Rabobank, N.A.
Rabobank, N.A. (National Association) is a nationally chartered bank serving California communities grounded in agriculture. Headquartered in Roseville, California, and with more than $13 billion in assets, Rabobank provides a wide range of financial products and services for individual, business, and food-and-agribusiness customers. Its 100 branches, multi-function ATMs, and online and mobile banking resources empower Californians to bank when, where and how they want. Committed to service, Rabobank’s more than 1,500 employees take pride in improving their communities personally and professionally. Rabobank, N.A. is a Member FDIC and Equal Housing Lender. Visit www.rabobankamerica.com.
The information presented herein contains forward-looking statements giving Mechanics Bank’s and Rabobank, N.A.’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 Bank nor Rabobank, N.A. 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 transaction on the expected terms and schedule or at all; delay in closing the transaction; difficulties and delays in integrating the Mechanics Bank and Rabobank, N.A. 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 Bank and Rabobank, N.A.’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.
# # # #
Vice President of Marketing
Need login assistance