NOVATO — Umpqua Holdings Corp. (Nasdaq: UMPQ), the parent company of Portland, Ore.-based Umpqua Bank, today announced a definitive agreement to acquire Novato-based Circle Bank and its parent company for $24.9 million.
Upon the completion of the acquisition, all six of Circle Bank’s branches will operate under the Umpqua name, joining Umpqua’s other branches in the North Bay. The transition is expected to be completed in the fourth quarter of 2012.
The acquisition includes a $20.4 million cash consideration for common shareholders, or $17.75 per share. Shoreline Capital Partners LP is the largest common shareholder of Circle Bank, with 99 percent of the outstanding shares of common stock of its parent company, Circle Bancorp. The total value also includes a $3.5 million cash redemption of preferred stock and the value of outstanding options and warrants.
The combined organization will have an asset value of about $11.8 billion, deposits of about $9.4 billion and shareholders’ equity of about $1.7 billion.
Umpqua initiated discussions of an acquisition, following the bank’s previously announced plan to seek growth opportunities in the Bay Area, said Kimberly Kaselionis, CEO of Circle Bank.
Circle Bank’s national profile had increased in recent years, following efforts for an initial public offering that began in late 2010.
"We had grown very rapidly, and we were at a place where we needed more capital to make the loans that the community needed," said Kit Cole, chair and CEO of Circle Bancorp.
The company's board of directors was quickly inundated with unsolicited offers from other banks, delaying the initial public offering but allowing the board to consider a variety of options, she said.
"We had the leisure of picking an organization that was the best fit. We didn't just pick the highest bidder," she said.
Ms. Cole noted that Umpqua agreed to acquire Circle Bancorp for a price-per-share that was nearly 60 percent higher than the $10.50-per-share pricing planned in Circle's IPO.