LOS ANGELES--(BUSINESS WIRE)--Nov. 19, 2001--City NationalCorporation (NYSE:CYN), parent company of City National Bank, andCivic BanCorp (Nasdaq:CIVC), parent of CivicBank of Commerce, todayannounced a definitive agreement for the acquisition of Civic by CityNational in a transaction currently valued at $113 million in cash andstock.
Civic is one of the Bay Area's leading independent business banks,with offices throughout the East Bay and assets of $510 million, loansof $375 million and deposits of $443 million as of Sept. 30, 2001.
Assuming the transaction closes in the first quarter of 2002, andexcluding any revenue enhancements, City National expects thetransaction to be accretive to its GAAP and cash earnings per share in2002.
``We are very pleased that Civic's talented management team andoutstanding clients and shareholders will be joining City National,''said City National CEO Russell Goldsmith. ``During the last two years,City National Bank has steadily expanded in the San Francisco BayArea, and this combination will bring our Bay Area assets to $1billion while extending our platform for growth in a measured andfocused way in the world's 18th largest economy.
``Civic's clear identity as a commercial bank, primarily in theEast Bay, strongly complements our private and business bankingpresence on the Peninsula and our new commercial banking center inWalnut Creek,'' Goldsmith added.
Herbert C. Foster, Civic's president and chief executive officer,who will join City National as its Northern California East Bay AreaExecutive, said: ``This is an excellent fit of two relationship-basedbanks. The combination of Civic with California's premier private andbusiness bank will allow our clients to continue their establishedrelationships with our bankers - while giving them access to an evenbroader array of financial products, services and capabilities. We areoptimistic that these broader capabilities will enable us to do morefor our clients and to win a greater share of their business.''
Terms of the Transaction
Under terms of the agreement, each of the 5.3 million shares ofCivic stock will be exchanged - at each shareholder's election --either for cash of $20.25 per share or for an amount of City Nationalstock based on the average per share price of City National commonstock for a 10-day trading period immediately prior to the closing. Ifthis average price of City National stock is (1) between $37.56 - and$50.82 per share, each share of Civic stock may be exchanged for0.4582 of a share of City National stock, (2) less than $37.56 pershare, the exchange ratio will equal $17.21 divided by the averageprice of City National stock, and (3) greater than $50.82, theexchange ratio will equal $23.29 divided by the average price of CityNational stock. Since each Civic shareholder may elect to receivecash, stock or a combination of both, these elections may have to bepro-rated to ensure that between 47% and 53.5% of the totalconsideration is paid in City National stock. City National commonstock received by Civic shareholders is expected to qualify as atax-free exchange.
The completion of the transaction is subject to regulatory andCivic shareholder approval. The two companies' boards of directorshave approved the transaction.
CivicBank of Commerce, a subsidiary of Civic BanCorp(Nasdaq:CIVC - news), serves companies, their owners and the professionalcommunity through 10 offices throughout the Bay Area, including itsheadquarters in Oakland. Sixty percent of its $375-million loanportfolio is comprised of commercial loans, and it has no technologyloans.
About City National Corporation
City National Corporation, whose shares are traded on the New YorkStock Exchange, has $9.8 billion in assets. The company's wholly ownedsubsidiary, City National Bank, provides banking, trust and investmentservices through 50 offices in 10 counties across California. For moreinformation about City National, visit its Web site at www.cnb.com.
A call with analysts and investors will be held at 11:30 a.m.,Eastern Standard Time, on Monday, Nov. 19, 2001 to review thisannouncement. A live Webcast of this call may be accessed through alink on City National's Web site at www.cnb.com, or athttp://www.vcall.com/NASApp/VCall/EventPage?ID=79823. The call will bearchived on the Web site and available for replay beginningapproximately one hour after the live call ends.
Except for historical information, all other information in thisnews release consists of forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995. Theseforward-looking statements include, but are not limited to, (i)statements about the benefits of the merger between City National andCivic, including future financial and operating results, cost savings,enhancements to revenue and accretion to reported earnings that may berealized from the merger; (ii) statements about City National's andCivic's plans, objectives, expectations and intentions and otherstatements that are not historical facts; and (iii) other statementsidentified by words such as ``expects,'' ``anticipates,'' ``intends,''``plans,'' ``believes,'' ``seeks,'' ``estimates'' or words of similar meaning.These forward-looking statements are based upon the current beliefsand expectations of City National's and Civic's management and areinherently subject to significant business, economic and competitiveuncertainties and contingencies, many of which are beyond our control.In addition, these forward-looking statements are subject toassumptions with respect to future business strategies and decisionsthat are subject to change.
The following factors, among others, could cause actual results todiffer materially from the anticipated results or other expectationsexpressed in the forward-looking statements: (1) the businesses ofCity National and Civic may not be combined successfully, or suchcombination may take longer, be more difficult, time-consuming orcostly to accomplish than expected; (2) the expected growthopportunities and cost savings from the merger may not be fullyrealized or may take longer to realize than expected; (3) operatingcosts, customer losses and business disruption following the merger,including adverse effects on relationships with employees, may begreater than expected; (4) governmental approvals of the merger maynot be obtained, or adverse regulatory conditions may be imposed inconnection with governmental approvals of the merger; (5) thestockholders of Civic may fail to approve the merger; (6) adversegovernmental or regulatory policies may be enacted; (7) the interestrate environment may further compress margins and adversely affect netinterest income; (8) the risk of continued diversification of assetsand adverse changes to credit quality; (9) competition from otherfinancial services companies in City National's and Civic's markets;(10) the concentration of City National's and Civic's operations inCalifornia may adversely affect results if the California economy orreal estate market declines; and (11) the risk of an economic slowdownthat would adversely affect credit quality and loan originations.
Additional factors that could cause actual results to differmaterially from those expressed in the forward-looking statements arediscussed in City National's and Civic's reports (such as AnnualReports on Form 10-K, Quarterly Reports on Form 10-Q and CurrentReports on Form 8-K) filed with the Securities and Exchange Commissionand available at the SEC's Internet site (http://www.sec.gov).
All written and oral forward-looking statements contained in thisnews release concerning the proposed transaction or other mattersattributable to City National, Civic or any person acting on theirbehalf are expressly qualified in their entirety by the cautionarystatements above. City National and Civic do not undertake anyobligation to update any forward-looking statement to reflectcircumstances or events that occur after the date the forward-lookingstatements are made.
The proposed transaction will be submitted to Civic's stockholdersfor their consideration. City National and Civic will file aregistration statement, a proxy statement/prospectus and otherrelevant documents concerning the proposed transaction with the SEC.Stockholders are urged to read the registration statement and theproxy statement/prospectus when it becomes available and any otherrelevant documents filed with the SEC, as well as any amendments orsupplements to those documents, because they will contain importantinformation. You will be able to obtain a free copy of the proxystatement/prospectus, as well as other filings containing informationabout City National and Civic, at the SEC's Internet site(http://www.sec.gov). Copies of the proxy statement/prospectus and theSEC filings that will be incorporated by reference in the proxystatement/prospectus can be obtained, without charge, by directing arequest to Mr. Heng W. Chen, City National Corporation, 400 NorthRoxbury Drive, Beverly Hills, California 90210 (310/888-6000) or toSecretary, Civic BanCorp, 2101 Webster Street, 14th Floor, Oakland,California 94612 (510/836-6500).
Civic and its directors and executive officers may be deemed to beparticipants in the solicitation of proxies from the stockholders ofCivic in connection with the merger. Information about the directorsand executive officers of Civic and their ownership of Civic commonstock is set forth in the proxy statement, dated April 3, 2001, forCivic's 2001 annual meeting of stockholders, as previously filed withthe SEC on a Schedule 14A. Additional information regarding theinterests of these participants may be obtained by reading the proxystatement/prospectus regarding the proposed transaction when itbecomes available.
City National / Civic At-a-Glance At or for the Period Ended Sept. 30, 2001($ in millions) City National CivicTotal Assets $9,786 $510Equity $875 $58Market Capitalization (11/16/01) $2,039 $82Net Income (9 months '01) $107.4 $3.8Total Deposits $7,400 $443Total Loans $6,758 $375Commercial Loans to Total Loans 44% 60%Construction Loans to Total Loans 9% 2%NPAs / Total Loans 0.59% 1.25%Reserves / Loans 2.00% 1.86%Reserves / NPAs 342% 148%Net Interest Margin (3Q) 5.28% 5.27%Cash Efficiency Ratio (3Q) 49.5% 66.6%Offices in East Bay Area 1 8Total Banking Offices 50 10Contact:City National Corporation Frank Pekny, 310/888-6700 (Financial/Investors) Cary Walker, 213/833-4715 (Media) or Abernathy MacGregor Group Ian Campbell, 213/630-6550 or Civic BanCorp Herbert C. Foster, 510/836-6500