Cedar Rapids Bank & Trust to Acquire Guaranty Bank and Trust Company from Guaranty Bankshares, Ltd.

 

Posted by Cedar Rapids Bank & Trust on Friday, June 9, 2017

Cedar Rapids Bank & Trust (CRBT) today announced its plans to expand its local presence in Cedar Rapids after QCR Holdings, Inc. (NASDAQ/QCRH), CRBT’s holding company, signed a definitive agreement to acquire Guaranty Bank and Trust Company (Guaranty Bank) from Guaranty Bankshares, Ltd.  Following the closing of this acquisition, Guaranty Bank will be merged into Cedar Rapids Bank & Trust Company (CRBT).

Established as a de novo bank in 1934, Guaranty Bank is headquartered in Cedar Rapids, Iowa, with five banking locations. As of March 31, 2017, Guaranty Bank reported approximately $267 million in assets and approximately $213 million in deposits.

Cedar Rapids Bank & Trust was established as a de novo bank in 2001 and provides full-relationship commercial and consumer banking and trust and asset management services. As of March 31, 2017, Cedar Rapids Bank & Trust reported approximately $929 million in assets, with two banking locations in Cedar Rapids.

Larry J. Helling, President and Chief Executive Officer of Cedar Rapids Bank & Trust commented, “We are excited about growing our presence in Cedar Rapids and the opportunity to serve the Guaranty Bank commercial, retail and wealth management customers in our hometown.  Our cultures and our teams complement each other in many ways. Guaranty Bank has a proven legacy of understanding and serving the customer and community’s needs. We hope to enhance this with our expanded products and services, enhanced lending and leasing capabilities, synergy of expertise and increased scale as we combine our two organizations to create the largest community bank in Linn County. We look forward to serving our region as a stronger local financial institution and are honored to welcome the clients and employees of Guaranty Bank to our organization.”

Robert D. Becker, Chairman and President of Guaranty Bankshares said, “Guaranty Bank began serving the Cedar Rapids community over 83 years ago.  This acquisition provides broader services to our customers while providing greater opportunities for our shareholders.”

Christopher J. Lindell, President and Chief Executive Officer of Guaranty Bank stated, “We are excited about joining forces with Cedar Rapids Bank & Trust. Partnering with CRBT will allow us to further broaden the reach of our mission which is to consistently exceed expectations by providing solutions which help our customers, our stakeholders and our communities prosper.  Customer service will remain our primary focus during and after this merger. For the near future, CRBT and Guaranty Bank do not anticipate any immediate changes to our organizations, so customers can continue doing business as usual.”

In the acquisition, QCR Holdings will acquire 100% of Guaranty Bank’s outstanding common stock, and certain other assets of Guaranty Bankshares, for aggregate consideration of 79% QCR Holdings common stock and 21% cash.  The projected deal value at closing of the transaction is approximately $44.2 million. The transaction is subject to regulatory approval by bank regulators, approval by Guaranty Bankshares shareholders and certain closing conditions.  The transaction is expected to close late in the third quarter or early fourth quarter of 2017. Once approved, the two banks plan to merge operations for optimal efficiency and client convenience. 

Piper Jaffray & Co. served as financial advisor to Cedar Rapids Bank & Trust and QCR Holdings. Barack Ferrazzano Kirschbaum & Nagelberg LLP served as legal counsel.  Sheshunoff & Co. Investment Banking, L.P. served as financial advisor to Guaranty and Hunton & Williams LLP served as legal counsel.

 

Special Note Concerning Forward-Looking Statements

This document may contain forward-looking statements within the meaning of the federal securities laws with respect to the financial condition, results of operations, plans, objectives, future performance and business of QCR Holdings and Guaranty.  Forward-looking statements, which may be based upon beliefs, expectations and assumptions of QCR Holdings’s and Guaranty’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions.  Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and neither QCR Holdings nor Guaranty undertakes any obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the ability of QCR Holdings and Guaranty to control or predict, could cause actual results to differ materially from those in any forward-looking statements.  These factors include, among others, the following: (i) the possibility that any of the anticipated benefits of the proposed transaction between QCR Holdings and Guaranty will not be realized or will not be realized within the expected time period; (ii) the risk that integration of operations of Guaranty with those of QCR Holdings will be materially delayed or will be more costly or difficult than expected; (iii) the inability to complete the proposed transaction due to the failure of the required stockholder approval; (iv) the failure to satisfy other conditions to completion of the proposed transaction, including receipt of required regulatory and other approvals; (v) the failure of the proposed transaction to close for any other reason; (vi) the effect of the announcement of the transaction on customer relationships and operating results; (vii) the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (viii) the strength of the local, national and international economy; (ix) changes in state and federal laws, regulations and governmental policies concerning QCR Holdings’s and Guaranty’s general business; (x) changes in interest rates and prepayment rates of QCR Holdings’s and Guaranty’s assets; (xi) increased competition in the financial services sector and the inability to attract new customers; (xii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (xiii) the loss of key executives or employees; (xiv) changes in consumer spending; (xv) unexpected results of acquisitions, including the acquisition of Guaranty; (xvi) unexpected outcomes of existing or new litigation involving QCR Holdings or Guaranty; (xvii) the economic impact of any future terrorist threats or attacks; (xviii) the economic impact of exceptional weather occurrences such as tornadoes, hurricanes, floods, and blizzards; and (xix) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning QCR Holdings and its business, including additional factors that could materially affect QCR Holdings’s financial results, are included in QCR Holdings’s filings with the Securities and Exchange Commission (the “SEC”).

Additional Information

QCR Holdings will file a registration statement on Form S-4 with the SEC in connection with the proposed transaction. The registration statement will include a proxy statement of Guaranty that also constitutes a prospectus of QCR Holdings, which will be sent to the stockholders of Guaranty. Guaranty’s stockholders are advised to read the proxy statement/prospectus when it becomes available because it will contain important information about QCR Holdings, Guaranty and the proposed transaction. When filed, this document and other documents relating to the proposed transaction filed by QCR Holdings and Guaranty can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge by accessing QCR Holdings’s website at www.qcrh.com under the tab “Investors Relations” and then under “SEC Filings.” Alternatively, these documents, when available, can be obtained free of charge from QCR Holdings upon written request to QCR Holdings, Inc., Corporate Secretary, 3551 7th Street, Moline, Illinois 61265 or by calling (309) 736-3584, or from Guaranty, upon written request to Guaranty Bankshares, Ltd., Chris Lindell, 302 Third Avenue Southeast, Cedar Rapids, Iowa 52401 or by calling (319) 286-6208.

This document shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended

Participants in this Transaction

QCR Holdings, Guaranty and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from stockholders in connection with the proposed transaction under the rules of the SEC. Information about these participants may be found in the definitive proxy statement of QCR Holdings relating to its 2017 Annual Meeting of Stockholders filed with the SEC on April 3, 2017. This definitive proxy statement can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants will also be included in the proxy statement/prospectus regarding the proposed transaction when it becomes available.