BBVA to Acquire Laredo National Bancshares, Inc. in Texas
* The transaction, with a purchase price of $ 850 million, is expected
to be accretive starting in the first year
* LNB has $ 3.4 billion in total assets, 110,000 customers and a
market share of 23% in the Texas-Mexico border region
* Hispanic population in LNB's footprint is above 5 million; Hispanics
are expected to be the fastest growing demographic group in Texas
and the US as a whole
* After the closing, LNB will become part of BBVA's new US division
that currently comprises BBVA Puerto Rico, BTS and will include
Valley Bank
* Francisco Gonzalez, Chairman & CEO BBVA: "This transaction gives us
a top position in one of the priority markets for our US strategy"
* Jose Ignacio Goirigolzarri, President & COO BBVA: "Profitable growth
is a key element of BBVA's strategy, today and in the future"
MADRID, Spain, Sept. 21 /PRNewswire-FirstCall/ -- Banco Bilbao Vizcaya
Argentaria (BBVA), based in Spain, announced today that it has reached
agreement to acquire Laredo National Bancshares, Inc. (LNB), the leading
financial services provider to the Hispanic market in the Texas-Mexico border
area, with $ 3.4 billion in total assets and 110,000 customers. The
transaction is expected to create value for BBVA's shareholders from the
outset and has a purchase price of $850 million (euro 700 million), to be
financed through BBVA's internal resources. With this transaction, which is
expected to close during the first quarter of 2005, BBVA moves forward with
its goal of becoming a leading financial services company for the Hispanic
market.
"We are very excited about this transaction because it gives us a top
position in one of the priority markets for our US strategy," said Francisco
Gonzalez, Chairman & CEO of BBVA. "This is an area with a massive Hispanic
presence, more than 5 million people. In addition, approximately 38% of the
border trade between the US and Mexico is done through Laredo, a business
activity in which LNB has a predominant market share."
"Step by step, we are firmly moving forward into the US Hispanic market,
continuing our value enhancing strategy," the BBVA chairman added.
"LNB's acquisition makes all the sense within BBVA's strategy, launched in
2002," said Jose Ignacio Goirigolzarri, BBVA's President & COO. "Profitable
growth is a key element of BBVA's strategy, today and in the future. Value
creation is our most important commitment with our shareholders."
A leading franchise
Laredo National Bancshares is the holding company of two banks -- The
Laredo National Bank and South Texas National Bank of Laredo -- which have
total assets of $3.4 billion and total deposits of $ 2.8 billion and operate
through 35 branches. Laredo National Bank also owns Homeowners Loan
Corporation, a nationwide residential mortgage lender with operations in 49
states, and has subsidiaries engaged in insurance and securities brokerage.
With almost 1,800 employees -- 97 percent bilingual -- LNB is uniquely
well positioned to be the leading financial services company in the South
Texas Border region, where it has a 23% market share in deposits and currently
serves a customer base of 110,000 individuals, 85 percent of Hispanic origin.
Currently, LNB is expanding its core markets to adjacent regions within Texas,
leveraging its ability to service the needs of the Hispanic community.
Continuing its strong growth, in 2003 LNB had net income of $ 40 million,
a 22% increase over the previous year, with a return on equity (ROE) of 15.4%.
Strengthening the US strategy
With this acquisition -- expected to close in the first quarter 2005
subject to regulatory approval in Spain and the US and other customary closing
conditions- BBVA takes an important step forward in its US strategy, with the
goal of developing a leading franchise in financial services for the Hispanic
community.
In July 2004, BBVA announced the establishment of a new business unit
charged with developing its strategy for the US market. Following the
acquisition, LNB will become part of BBVA's US division, which currently
comprises BBVA Puerto Rico and BTS.
In May 2004, BBVA announced the agreement to acquire California-based
Valley Bank, which currently has six branches located in the Southern region
of the State.
BBVA has also a strong presence in Puerto Rico, with the fifth largest
bank in the Spanish-speaking Commonwealth. BBVA Puerto Rico has an important
consumer finance business, with a focus on mortgages and auto lending.
BTS is the leading company in the money remittance business between the US
and Mexico, with a market share of approximately 40%. Last year, Mexican
residents in the US sent to their origin country more than $ 14.5 billion,
according to data provided by Banco de Mexico.
About BBVA
BBVA is the leading financial player in the Spanish-speaking countries,
both in Spain and Latin America. BBVA provides to its 35 million customers in
37 countries a full range of financial services, including commercial and
wholesale banking, pension plans' management and insurance, among others.
With 316.4 billion euros in total assets as of June 2004, 2.2 billion euros in
net income last year -- a 29.5% increase compared to 2002 --, 85,000 employees
worldwide and close to 7,000 branches, BBVA is one of the top-three leading
Eurozone banks in terms of Return on Equity, Earnings Per Share growth and
efficiency.
Very attractive demographics prospects
* Hispanics are the fastest growing demographic in the US and represent
13% of the US population
* Total population in LNB's footprint is 13 million and it is expected to
grow to 15 million by 2008
* The concentration of Hispanics in LNB's footprint is 34% vs. 13% in the
U.S.
* Household income in LNB market is expected to grow by 9% compared to 5%
national average
* The Hispanics are an underserved segment: only 65% have checking
accounts vs. 95% of the "anglo" market
Main business lines
Laredo National Bank
* Provides products and services to commercial and retail customers
* Mainly Mexican customers (second generation and "borders").
* Other "anglo" customers in the Houston area
* $1.5 Bn in loans and $2.3 Bn in deposits
* 63% of LNB 2003 net income
South Texas National Bank
* A community bank focused on commercial and retail customers
* Lower Mexican customers penetration, more "anglo"
* $297 Mn in loans and $543 Mn in deposits
* 15% of LNB 2003 net income
Homeowners Loan Corporation
* A non-prime mortgage lender based in Atlanta, GA licensed to operate in
49 states
* Activity focused in the production and sales of mortgages
* $1,300 Mn. loan volume is expected for 2004
* Primary origination channels direct mail and internet
* 22% of LNB 2003 net income
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including projections about the future earnings of the business. The
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said earnings may be substantially modified in the future by certain risks,
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These factors include, without limitation, (1) the market situation,
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SOURCE BBVA
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