First Bank, a wholly owned subsidiary of First Banks, has signed a purchase and assumption agreement providing for the sale of certain assets and the transfer of certain liabilities of its Chicago franchise to FirstMerit Bank, a wholly-owned subsidiary of FirstMerit Corporation, headquartered in Akron.
First Bank has also signed a loan purchase agreement providing for the sale of certain loans and the transfer of certain liabilities of First Bank Business Capital, its wholly owned asset based lending subsidiary, to FirstMerit.
Under the terms of the agreements, FirstMerit is to assume all of the deposits associated with First Bank’s 24 Chicago retail branches, including certain commercial deposit relationships. FirstMerit is also expected to purchase approximately $315m of loans as well as certain other assets, including premises and equipment, associated with First Bank’s Chicago operations, and approximately $100m of asset-based lending loans associated with FBBC.
Terrance McCarthy, president and CEO of First Banks, said: “The sale of our Chicago franchise represents the successful completion of another portion of our capital optimization planning process as we continue to realign our business strategies and reallocate capital in response to the current economic downturn.
With today’s announced sale of our Chicago franchise and a portion of our asset based lending portfolio, we will generate approximately $75m of risk-based capital benefit.
“With the previously announced closing of the sale of Adrian Baker & Company on September 30, 2009, and the previously announced sale of our Texas Region, which is expected to be completed in the fourth quarter of 2009, we will have generated approximately $145m of risk based capital benefit through our divesture activities.”
Hovde Financial served as financial adviser and Bryan Cave served as legal adviser to First Bank.
