Dive Brief:
- Jericho, New York-based Esquire Financial Holdings will acquire Signature Bancorporation, headquartered in Rosemont, Illinois, in a roughly $348.4 million deal set to close in the third quarter, the companies said Thursday.
- The transaction will create a roughly $4.8 billion-asset bank and give Esquire an inroad to the Chicago commercial banking and real estate markets, the companies said.
- Signature, in return, will gain access to Esquire’s litigation vertical and national platform, according to a statement Thursday.
Dive Insight:
As part of the deal, Signature investors will receive 2.63 shares of Esquire for each share of Signature common stock they own. That’s $260.48 per share for Signature shareholders, based on Esquire’s $99.04 closing price from Wednesday.
In a statement, Esquire CEO Andrew Sagliocca called the transaction “compelling on multiple levels.”
“Financially, it enhances our operating profile, expands our resources, and diversifies our balance sheet while maintaining a robust capital position for continued expansion in our unique national litigation platform,” Sagliocca said, adding that the two bank’s commercial-banking capabilities were “highly complementary.”
“Most importantly, it unites two highly talented management teams with deep client relationships and strong market expertise,” Sagliocca said.
Once the transaction closes, the boards of Esquire Bank and its holding company will have 11 members – nine from Esquire and two from Signature: the bank’s CEO, Mick O’Rourke and its board chair, Leonard Caronia.
Additionally, O’Rourke and two of Signature’s other top executives, have signed employment agreements with Esquire wherein O’Rourke will serve as president of the Signature division of its Long Island-based acquirer. Bryan Duncan and Kevin Bastuga, each executive vice presidents at Signature, will serve as EVPs in the Signature division of Esquire once the deal closes.
“By bringing together Signature's strong Midwest commercial banking franchise with Esquire's national capabilities, we will have greater resources and expanded reach to support our clients as they grow,” O’Rourke said in a statement, adding that the deal “position[s] us to work together toward the next chapter of our combined organization's legacy.”
Esquire estimates the transaction to be roughly 11% accretive to tangible book value, with 23% accretion in earnings per share by 2027, the company said.
Additionally, the deal will reduce Esquire's reliance on its litigation vertical. The business is responsible for 70% or more of Esquire’s loans and funding now. After the Signature deal, though, that figure is expected to drop below 50%, the company said.
"Signature's leadership in the attractive Chicago market, best-in-class management team, and exceptional core funding provide Esquire with a strong platform for continued growth and expansion in the country's third largest metropolitan area … and one of the nation's largest legal markets,” Sagliocca said.
