Friday, January 19, 2007

Solano, Vintage Banks Sold

Solano, Vintage Banks Sold
Oregon-Based Umpqua Bank Purchases All 10 Local Branches in a Deal Worth $156 Million.
By Amanda Janis/Business Editor

Locally owned and independent Solano Bank will disappear from the financial landscape after it is acquired later this year in a $156 million deal disclosed Thursday.

The parent company of Oregon-based Umpqua Bank - Umpqua Holdings Corp., a $6 billion banking institution - is the buyer. When the sale is complete, all 10 local branches of Solano Bank and its sister, The Vintage Bank in Napa, will operate under the Umpqua name.

Solano Bank was launched in July 2000 as a division of The Vintage Bank, headquartered in Napa, but had its own local board of directors that included businessmen and women from Vacaville, Fairfield, Napa and Vallejo. It expanded from its first branch in Vacaville to include others in Fairfield, Vallejo and Benicia.

As of June 2006, North Bay Bankcorp, parent company of Solano Bank and The Vintage Bank, ranked ninth in terms of Solano County deposit market share, according to the Federal Deposit Insurance Corp. With a 3.43 percent share of the deposits, it ranked third among locally owned banks, behind Westamerica (sixth), Dixon-based First Northern (seventh) and Bank of Rio Vista (10th).

We see the attractiveness of the Solano and Napa markets," Ray Davis, president and chief executive officer of Umpqua Holdings Corporation, told The Reporter. "You look at these two organizations (Solano Bank and The Vintage Bank) and they're both strong companies."

The idea to acquire them, Davis said, stemmed from his long-term friendship with Terry Robinson, North Bay's president, chief executive officer and director.

"I've known Terry for a long time, and we've always wondered what would happen if we did get together," he said. The window of opportunity opened, Davis said, and both parties saw the value in "scaling up."

Umpqua's nearest branches are in Woodland and Napa. The deal, announced Thursday and expected to close in the second quarter of the year, will bring to 144 the total number of Umpqua's branches in Northern California, Oregon and Washington.

Shareholders of North Bay Bancorp will receive 1.217 shares of Umpqua common stock for each share of North Bay Bancorp common stock. About 5.1 million Umpqua shares are expected to be issued.

News of the acquisition sent North Bay Bancorp shares to an all-time high of $34.40 during intraday trading on the New York Stock Exchange; it closed at $33.75 per share, up $3.75, or 12.5 percent, from Thursday morning's opening. Umpqua shares closed at $28.25 per share, down 52 cents or 1.81 percent from its opening price.

The combined organization will have assets of approximately $8 billion, deposits of approximately $6.1 billion and shareholders' equity of approximately $1.3 billion.

The new owners will assume key leadership roles in the combined organizations. Davis will continue as president and chief executive officer of Umpqua Holdings Corporation, while Bill Fike will continue as president of Umpqua California.

Though Davis told The Reporter it's too early to say what role most of the existing executives and managers of Solano Bank or the Vintage Bank will play in the new company, he was able to discuss the plans for two top-level executives.

Glen Terry, president of The Vintage Bank and Solano Bank, will stay with the organization in a senior executive role. "We see him as an instrumental part of growing," Davis noted.

Robinson, meanwhile, will stay with the organization through its entire transition period, and eventually retire. Davis said Robinson already had been planning to retire in the near term.

Davis was unable to say how many employee positions might be made redundant by the transaction, but noted that where it would be necessary to eliminate duplicate positions, Umpqua would do everything possible to make sure those workers find employment.

In a note to local business leaders, longtime Solano Bank executive John Nerland said Thursday, "We can sincerely state that (the sale) represents an excellent outcome for our shareholders, customers and employees."

The boards of both companies have approved the transaction, which is subject to regulatory approval and approval by the shareholders of North Bay Bancorp, as well as other customary conditions of closing.

Umpqua Holdings Corp., also parent of retail broker Strand, Atkinson, Williams & York Inc., partnered in the buyout of the bank.

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