WALNUT CREEK, Calif. & ROSEVILLE, Calif.--(BUSINESS WIRE)--Mechanics Bank (OTCBB: MCHB) and Rabobank, N.A., a subsidiary of Rabobank Group, today announced plans for the leadership of the new Mechanics Bank following the strategic combination of the two entities.
Effective Legal Day One, John DeCero, President and CEO of Mechanics Bank, and Mark Borrecco, CEO of Rabobank, N.A., will serve as Co-CEOs of the new organization. The announcement was made by Carl B. Webb, Chairman of the Board of Mechanics Bank. Mr. Webb, Mr. DeCero and Mr. Borrecco will also become members of a newly created Office of the Chairman, which will chart the future direction of the combined bank.
Under a strategic business combination announced in March, Mechanics Bank is set to acquire Rabobank, N.A.’s retail, business banking, commercial real estate, mortgage, and wealth management businesses. The combined entity is slated to operate under the Mechanics Bank name, with 144 branches and in excess of $17 billion in total assets.
“This unique Co-CEO structure will put tremendous experience and expertise at the helm of our new bank,” said Mr. Webb. “Both John and Mark are very successful CEOs, and their individual capabilities, skills and personalities are highly complementary of one another. Working together, they will be a powerful and successful team in unlocking the full potential of this unique franchise and establishing Mechanics Bank as the premier community bank in California.”
Following the close of the transaction, Mr. DeCero will oversee commercial banking, wealth management and indirect auto finance at the new organization. With more than 29 years of banking experience, he has served as President & CEO of Mechanics Bank since October 2016. He was a co-founder of California Republic Bank, which was acquired by Mechanics Bank in 2016. He built a successful commercial banking group for the former Western Financial Bank and has also held positions at Citicorp and Comerica Bank. Born and raised in Chicago, he has a degree in finance from Augustana College in Illinois.
Mr. Borrecco will oversee the retail banking and consumer lending activities at the combined organization. A 25-year banking veteran, he was named CEO of Rabobank, N.A. in 2015. Prior to that, he was national retail sales manager for Bank of the West and has held positions at several other financial institutions, including Wachovia and World Savings. A California native, he received a bachelor’s degree in economics from California State University, Fresno.
“Bank mergers with this much potential don’t happen often,” said Mr. DeCero. “We are going to embrace the strong, complementary attributes of both organizations to build a powerful financial institution that delivers an outstanding customer experience across both the retail and commercial segments. Mark and I are committed to a partnership of innovation that will drive growth in all of our business lines.”
“Combining forces with high-performing bankers who demonstrate our same strong values and deep connectivity to our local markets is a very exciting prospect,” said Mr. Borrecco. “John and I share a common vision for the combined bank and will be working closely together to leverage its many tremendous strengths on behalf of our clients, shareholders and the communities we serve.”
Total consideration for the transaction will be approximately $2.1 billion, subject to customary purchase price adjustments at closing. As part of the total consideration payable in the transaction, Rabobank Group will receive 9.9% of the outstanding shares of Mechanics Bank after giving effect to the transaction. Currently, 79% of Mechanics Bank’s outstanding shares are owned by Ford Financial Fund II.
The transaction is expected to close in the third quarter of 2019. Completion is subject to customary closing conditions, including receipt of regulatory approvals. Customers of both banks will continue to work with their current local bankers and should expect business as usual during the transition.
About Mechanics Bank
Established in 1905, Mechanics Bank is an independent, full-service community bank, based in Walnut Creek, California. With more than $6 billion in assets, it is the largest bank headquartered in Northern California’s East Bay region, with 43 branch offices throughout California and one in Medford, Oregon. Mechanics Bank provides a highly personalized relationship banking experience that includes consumer and business banking services, commercial lending, cash management services, and comprehensive trust, investment and wealth management services. Mechanics Bank is a Member FDIC institution and Equal Housing Lender. More information may be found at www.mechanicsbank.com.
About Rabobank, N.A.
Rabobank, N.A. (National Association) is a nationally chartered bank serving California communities grounded in agriculture. Headquartered in Roseville, California, and with more than $13 billion in assets, Rabobank provides a wide range of financial products and services for individual, business, and food-and-agribusiness customers. Its 100 branches, multi-function ATMs, and online and mobile banking resources empower Californians to bank when, where and how they want. Committed to service, Rabobank’s more than 1,500 employees take pride in improving their communities personally and professionally. Rabobank, N.A. is a Member FDIC and Equal Housing Lender. Visit www.rabobankamerica.com.
The information presented herein contains forward-looking statements giving Mechanics Bank’s and Rabobank, N.A.’s expectations or predictions of future financial or business performance or conditions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. Forward-looking statements speak only as of the date they are made and neither Mechanics Bank nor Rabobank, N.A. assumes any duty to update forward-looking statements. Certain risks and uncertainties that could cause actual results to differ materially from forward-looking statements and historical performance include, but are not limited to, the following: ability to obtain regulatory approvals and meet other closing conditions to the transaction on the expected terms and schedule or at all; delay in closing the transaction; difficulties and delays in integrating the Mechanics Bank and Rabobank, N.A. businesses or fully realizing cost savings and other benefits; business disruption following the proposed transaction; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; Mechanics Bank and Rabobank, N.A.’s businesses experiencing disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities; economic and capital market conditions; and the impact, extent and timing of technological changes, capital management activities, and other actions of regulatory agencies.