TierOne, the holding company for Nebraska-based TierOne Bank, has entered into a definitive agreement to sell deposits, selected loans and other assets associated with 32 of the bank’s branch offices to Great Western Bank, a South Dakota-based subsidiary of National Australia Bank.
Under the terms of the agreement, Great Western Bank will assume approximately $1.1 billion in deposits. The bank will transfer or sell to Great Western Bank approximately $800 million in loans, $20 million in real estate and other assets and the balance in cash or securities less a $55 million deposit premium paid. Upon completion of the transaction, TierOne bank will have 37 banking offices located in Nebraska, Iowa and Kansas and approximately $2 billion in assets.
Gilbert Lundstrom, chairman and CEO, TierOne, said: “After the branch office sale, TierOne Bank will return to its community bank footprint and will enhance its capital position. Completion of the transaction will fortify the bank’s capital levels. This additional capital will strengthen our ability to continue to address selected asset quality issues and improve our capacity to manage through this challenging economic period. As we have in the past, we will continue to evaluate our loan portfolio and take necessary action to manage our balance sheet.”
However, the transaction is subject to regulatory approval and other customary closing conditions, and it is expected to be completed by late 2009.
