U.S. Bancorp Plans to Buy San Diego Bank
U.S. Bancorp, the 13th-largest U.S. bank, said Thursday that it plans to buy San Diego-based Bank of Commerce for about $314 million in stock to expand its small-business lending on the West Coast.
Minneapolis-based U.S. Bancorp said it would pay Bank of Commerce holders 0.6 shares of U.S. Bancorp stock for each share of Bank of Commerce. The purchase price would be about $314 million based on Thursday’s closing prices and Bank of Commerce’s 15.9 million outstanding shares.
The deal values Bank of Commerce at $19.76 a share, a 16% premium to its closing price Thursday but 27% below the stock’s 52-week high.
Before the deal was announced, U.S. Bancorp shares closed at $32.94, up $1.06 on the New Stock Exchange. Bank of Commerce shares rose 56 cents to close at $17.06 on Nasdaq. The banks said they will base the final deal price on an average of U.S. Bancorp shares for 20 trading days before the close of the transaction.
Bank of Commerce is the largest Small Business Assn. lender in California. Combined, the two banks said they would have more than $1 billion in SBA loans. Bank of Commerce had $638 million in assets at the end of 1998 and 10 branches in Orange and San Diego counties, the banks said.
“U.S. Bancorp’s resources will strengthen Bank of Commerce’s ability to help small businesses succeed and thereby expand our relationships with small businesses,” said John F. Grundhofer, chairman of U.S. Bancorp.
The banks said they expect the transaction to close next quarter and that the name of the Bank of Commerce branches will change to U.S. Bancorp. Peter Davis, chairman and chief executive of Bank of Commerce, will stay with U.S. Bancorp through November 2000 to help with the transition, the banks said.
U.S. Bancorp has $76 billion in assets and more than 1,000 banking offices, including 89 in Northern California. It also owns the Piper Jaffray brokerage business.