United Western Bancorp, the holding company for United Western Bank, has announced that its wholly owned subsidiary Sterling Trust Company has agreed to sell certain of its assets to Equity Trust Company and a newly formed administrative services company affiliated with Equity Trust Company for $61.2m, or $60.9m net of estimated direct expenses associated with the transaction, subject to certain adjustments.
Sterling Trust, a Waco, Texas based trust company, will retain its custodial escrow and paying agent lines of business and will continue to maintain trust operations in Texas for that purpose. The retained business will continue to be led by current Sterling Trust’s chairman and CEO, Paul Maxwell.
Sterling Trust Company will change its name, subject to certain regulatory approvals and conditions, following the closing of this transaction, and will operate the retained business under the new name.
Equity Trust Company and a newly formed administrative services company affiliated with Equity Trust Company (together, the buyer) will pay 25% of the purchase price in cash at closing and the remainder through financing to the buyer from seller. The seller financing will have a term of seven years, will bear interest at the prime rate, as adjusted from time to time, and is subject to certain floors and ceilings on the rate.
Completion of the transaction is subject to a number of customary conditions to closing, including the approval of the Texas Department of Banking, Sterling Trust’s principal regulator. Sterling Trust expects that the closing of the transaction will take place in the second calendar quarter of 2009.
As part of the Sterling Trust asset sale, for a period of 60 months following closing, the company has agreed that it and the companies that it controls, including Sterling Trust, will not solicit the customers and employees of the transferred business or to compete, or have any ownership interest in, any business which engages in a substantially similar business to the transferred business.
Scot Wetzel, president and CEO of United Western Bancorp, said: Proceeds from the Sterling Trust asset sale will provide United Western Bancorp with additional flexibility to execute our core community banking business plan at United Western Bank, our largest subsidiary, and to take advantage of unique strategic opportunities that might be created by the current economic and banking environments.
