Magazine article American Banker

First Interstate to Acquire Levy Bancorp in Stock Deal Valued at $86.5 Million

Magazine article American Banker

First Interstate to Acquire Levy Bancorp in Stock Deal Valued at $86.5 Million

Article excerpt

LOS ANGELES -- First Interstate Bancorp said Tuesday it agreed to acquire Levy Bancorp and its principal subsidiary, Bank of A Levy, in a stock transaction valued at $86.5 million, or 1.84 times book value.

The acquisition will boost First Interstate's standing in wealthy Ventura County, Calif., from sixth place to second, giving it 16% in total-deposit market share.

The deal, which marks First Interstate's second acquisition in Ventura County, is expected to close in the first quarter of 1995, subject to regulatory approval. It is slated to be accretive to earnings some time in 1995.

1.2M Share Repurchase Set

First Interstate said it would repurchase approximately 1.2 million common shares to finance the transaction, which will be accounted for as a purchase.

"Bank of A Levy is a recovering institution that experienced many of the typical problems facing commercial banks in the recession, particularly real estate. But it's got sizable market share and for the price First Interstate paid, I can't argue with it," said Dakin Securities' Campbell Chaney.

But Donaldson Lufkin & Jenrette's Tom Brown said he thought the price was "on the high end of the range." First Interstate's stock closed Tuesday trading at $74.625, down $1.25

Bank of A Levy holds $625 million of assets and 17 locations in Ventura County. First Interstate has eight offices in the county. It is unclear whether there will be any branch closings or layoffs as a result of the deal.

"With average household income and population growth well above state and national averages, Ventura County is strategically important to First Interstate," said Bruce G. …

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