BancWest Corporation (“BancWest”), a wholly owned subsidiary of BNP Paribas, has acquired Community First Bankshares (“Community First”), a Nasdaq listed company.
BancWest operates through 357 branches in seven Western states, primarily California and Hawaii. BancWest operates under the brands of Bank of the West on the Western US Mainland and First Hawaiian Bank in Hawaii. Community First operates through 155 branches in 12 states in the West and Midwest of the US.
Following the acquisition, BancWest will have 3.4 million customer accounts and over 500 branches. The company will rank as the seventh largest commercial bank in the Western US, a region covering 18 states, 100 million inhabitants, and with one of the strongest demographic growth trends in the US.
The US$1.2 billion purchase price is equivalent to 16.2 times reported earnings for 2003. It represents a 14% premium to the average closing stock price of Community First over the past three months.
Subsequent to the transaction, all Community First activities will continue under the Bank of the West brand.
In 2003, Community First reported total revenues of US$ 331 million, net income of 75 million dollars, and a RoE of 20.5%. The bank had US$ 5,465 million of assets as of 31 December 2003.
Traditionally focused on smaller communities, Community First has grown through a series of acquisitions over the past 15 years. It has a strong presence in Colorado, Wyoming, Minnesota and North Dakota. The bank also has retail operations in Arizona, New Mexico, Utah, South Dakota, Iowa, Wisconsin, Nebraska and California. Community First enjoys an average 17% market share in the counties where it operates.
“This transaction is in line with our strategy of `disciplined’ acquisitions, i.e. value-creating transactions of manageable size, in businesses and geographies of strong growth potential,” says Baudouin Prot, CEO of BNP Paribas. “This transaction is a great example of our efficient use of capital to strike deals with high synergies potential and low integration risks”.
Don McGrath, President and COO of BancWest added: “Community First is a profitable bank that has built strong relationships with its clients. Community First is a perfect match for Bank of the West. It operates in growing states that complement our existing footprint. This is a union of two complementary and compatible banks that makes sense both strategically and financially. It also creates new opportunities for further organic growth in the Western US.”
The transaction is currently subject to approval by Community First’s shareholders and by various regulatory agencies in the US. The transaction is expected to close in the third quarter of 2004. BNP Paribas and BancWest were advised by Lehman Brothers and BNP Paribas Corporate Finance.