) announced completion of the sale of its regional business in
Illinois to First Midwest Bank, the wholly-owned subsidiary of
First Midwest Bancorp Inc. (
). The sale was carried out by Popular Community Bank, the U.S.
banking subsidiary of Popular.
As per the deal, Popular sold 12 retail branches along with its
small business and middle market commercial lending activities in
Chicago. The transaction comprised $562 million in loans as well as
$726 million in deposits that the branches had as of Jul 31, 2014.
Moreover, the deal resulted in a net premium of around $18.4
million, before taking into account the customary transaction
related costs. This sale comes as part of the strategic
reorganization announced by Popular earlier this year.
According to Popular, it has entered into definitive agreements to
divest its 41 regional branches including approximately $1.8
billion in loan and $2.1 billion in deposits in California,
Illinois and Central Florida to three distinct buyers. The other
two sale transactions are expected to be concluded by the end of
Popular has undertaken this divestiture initiative to concentrate
solely on the central markets of New York and South Florida.
Moreover, the company looks forward to enhance business activities
and optimize invested capital by streamlining its operations.
On the other hand, this acquisition will further expand First
Midwest's footprint in Chicago and enable it to offer extended
products and services to its existing customers.
The financial advisor to Popular was RBC Capital Markets, LLC and
its legal counsels were Sullivan & Cromwell LLP and Chuhak
& Tecson, P.C.
Currently, Popular carries a Zacks Rank #2 (Buy). Some
better-ranked banks include Farmers Capital Bank Corp. (
) and Bank of the Ozarks, Inc. (
). Both these stocks hold a Zacks Rank #1 (Strong Buy).
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