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USAmeriBancorp Registration Statement Info Omission Class Action

The Proposed Transaction that USAmeriBancorp negotiated to merge with Valley National Bankcorp says that USAmeriBancorp stockholders will receive 6.1 shares of Valley for each of their shares of USAmeriBancorp, provided that Valley’s stock does not fall below a certain share price. But is this fair? The complaint for this class action claims that it is not possible for shareholders to evaluate the transaction because the Registration Statement omits too much information.

The class for this action is all public stockholders of USAmeriBancorp.

The company filed its Form S-4 Registration Statement with the Securities and Exchange Commission (SEC) on October 27, 2017, and the vote on the transaction is scheduled for December 14, making the need for more information urgent.

USAmeriBancorp is a holding company for its main subsidiary, USAmeriBank, which provides a high level of personalized service to the customer base it targets. The bank takes deposits from its market and makes loans in the same market, and also provides commercial and home mortgages, commercial and industrial loans, small business loans, and installment loans, among other businesses.

The complaint claims that USAmeriBancorp has been doing very well. It offers the following evidence from the company’s second-quarter 2017 report as compared to figures from the same period the previous year:

  • Net income: $12.5 million, as compared to $9.9 million.
  • Return on average common equity: 15.19%, as compared to 13.91%.
  • Net loans: $3.5 billion, as compared to $3.1 billion.
  • Total deposits $3.5 billion, as compared to $3.2 billion.
  • Book value per common share: $33.04, as compared to $28.94.
  • Ratio of non-performing assets to total loans: Improved to 0.97%, as compared to $1.02%.

The complaint thus wonders about the advantages of the merger with Valley, but it alleges that too much has been omitted from the Registration Statement for shareholders to fully understand the advantages of the proposed merger.

First, the complaint claims that figures are missing from the financial projections and valuation analyses performed by financial advisors Sandler O’Neill & Partners, and it details several areas where this is true.

Second, it claims that USAmeriCorp was originally advised by Hovde Group, but that the Registration Statement says nothing about what services it performed or the period or terms of the agreement.

Third, it claims that the company’s CEO and other persons have been offered “lucrative” new positions and agreements with Valley, the Registration Statement does not disclose any details about the timing and nature of communications regarding these agreements.

Fourth, it claims that the Registration Statement provides no information about whether the board talked to other parties that may have been interested in a merger with the company, and if it did not do so, why it did not.

All of these things, the complaint alleges, amount to violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934.

Article Type: Lawsuit
Topic: Securities

Most Recent Case Event

USAmeriBancorp Omitted Info in Merger Registration Statement Securities Complaint

November 29, 2017

The Proposed Transaction that USAmeriBancorp negotiated to merge with Valley National Bankcorp says that USAmeriBancorp stockholders will receive 6.1 shares of Valley for each of their shares of USAmeriBancorp, provided that Valley’s stock does not fall below a certain share price. But is this fair? The complaint for this class action claims that it is not possible for shareholders to evaluate the transaction because the Registration Statement omits too much information, including such things as the figures used in projections and evaluations and the details of negotiations for new positions for the company’s CEO and others.

usameribancorp_sec_compl.pdf

Case Event History

USAmeriBancorp Omitted Info in Merger Registration Statement Securities Complaint

November 29, 2017

The Proposed Transaction that USAmeriBancorp negotiated to merge with Valley National Bankcorp says that USAmeriBancorp stockholders will receive 6.1 shares of Valley for each of their shares of USAmeriBancorp, provided that Valley’s stock does not fall below a certain share price. But is this fair? The complaint for this class action claims that it is not possible for shareholders to evaluate the transaction because the Registration Statement omits too much information, including such things as the figures used in projections and evaluations and the details of negotiations for new positions for the company’s CEO and others.

usameribancorp_sec_compl.pdf
Tags: Mergers or Acquisitions, Providing False or Misleading Information, Registration Statement, Securities