Stock in Western Liberty Bancorp soars after Las Vegas bank merger announced
21 August 2012
That changed after a rival lender decided to buy the bank at a premium in a $55 million deal announced Friday.
Western Liberty’s stock jumped 34 percent Monday to $3.82 per share, up from $2.85 on Friday. It was the largest percentage gain that day of any company listed on the Nasdaq Stock Market or the New York Stock Exchange.
Phoenix-based Western Alliance Bancorp. announced Friday it signed a definitive agreement to buy Western Liberty. The deal is expected to close this fall.
Under the terms of the deal, Western Liberty shareholders can, among other things, choose to receive $4.02 in cash for each share they owned in the company.
Three years ago, Western Liberty’s stock hovered at a peak of about $9.80. The value of shares has since plunged, reaching a low of $2.26 last October.
Service1st was founded in January 2007 and, like many young banks, has been mired in red ink during its first few years. Its only profitable year so far was 2010, when it earned $186,000 of net income. The bank lost $12.4 million last year, $17.4 million in 2009, $5.1 million in 2008 and $4.2 million in 2007, according to Federal Deposit Insurance Corp. data.
When the sale closes, Service1st will merge into Bank of Nevada, which, as of last summer, had 12 branches in Southern Nevada and nearly $2.5 billion of local deposits. Service1st had two branches in the region and $132 million of deposits, according to the most recent FDIC data available.
Western Liberty plans to close one of those branches, located at 8965 S. Eastern Ave. The branch had roughly $36 million of deposits as of last summer.
By comparison, Service1st’s main office, at 8349 W. Sunset Road in Las Vegas, holds $96 million of deposits.
On Monday, shares of Western Alliance fell 1 cent to $9.53, a dip of 0.1 percent.
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