Banks Start Major Business Merger In California
On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Mergers & Acquisitions on Thursday, June 12, 2014.
The free market thrives when parties of business deals are able to mutually benefit from their agreements. This seems to have been the case in a recent business merger between two banks in California. The executives of these two banks came to the conclusion that merging their two banking firms would be mutually beneficial after having a conversation at a banking industry conference.
The two banks, 1st Enterprise Bank and California United Bank, will create a new entity with $1.9 billion in deposits and $2.2 billion in assets. The smaller 1st Enterprise Bank would be merged into the larger California United Bank. 1st Enterprise Bank was initially attracted to the idea of merging due to the possibility of obtaining larger clients as a result of the increase in total assets.
The newly formed bank would be one of the largest banking institutions within its specific region in California. The banking firm plans to focus mainly on financing small and medium-sized businesses. Most loans will be for companies to continue operations or for expanding their businesses. Many of the loans will be for mortgages on commercial property occupied by the bank’s customers.
On the other hand, a business merger in California needs to go through a specific legal process. The correct legal paperwork must be submitted to the proper regulatory agencies in order to ensure that the new legal entity is correctly and legitimately formed. Also, understanding all of the laws relevant to the particular industry can help when making important decisions during the business formation process.
Source: Los Angeles Times, "California United, 1st Enterprise Banks to Merge", E. Scott Reckard, June 5, 2014