Kbra comments on homebancorp, inc. acquisition by first citizens bank
& trust co.
New york--(business wire)--kroll bond rating agency (kbra) has commented on the acquisition of homebancorp, inc. by first citizens bank & trust co. kbra makes the following key points: on december 18, 2017, homebancorp, inc. and its subsidiary homebanc, announced a definitive agreement to merge with first citizens bank & trust co. (“first citizens”), the subsidiary bank of first citizens bancshares, inc. (nasdaq: fcnca). the deal is expected to close during the second quarter of 2018. the acquisition of homebancorp, inc. would allow first citizens to extend its florida branch network into the attractive tampa and orlando markets. an aggregate transaction value was not listed in the press release announcing the deal; however, pricing seems to be in line with that of similarly situated transactions that have been reviewed recently by kbra. while the merger will be an all cash transaction, the impact on first citizen’s capital should be marginal. in kbra’s view, if the deal is successfully executed and integrated, the transaction is a potential credit positive event for homebancorp’s subordinated debt holders given that homebancorp will be merged into a much larger, more diversified institution with a favorable financial track record. first citizens appears to be of sound overall financial condition. as of second quarter 2017 data, kbra’s subscription rating service (srs) rated first citizens b+ on the financial strength rating (fsr) scale. in september of 2017, kbra affirmed the senior unsecured debt rating of bbb, subordinated debt rating of bbb- and a short-term debt rating of k3 for homebancorp, inc. in addition, kbra affirmed the deposit and senior unsecured debt ratings of bbb+, subordinated debt rating of bbb, and short-term deposit and debt ratings of k2 for homebancorp’s bank subsidiary, homebanc. the outlook on the long-term ratings is stable. ratings of homebancorp, inc, and its subsidiary bank will likely be withdrawn when the merger closes, given that homebancorp, inc. and homebanc will merge into first citizens bancshares, inc. and first citizens bank & trust co., respectively. the ratings are based on kbra’s global bank and bank holding company rating methodology published on february 19, 2016. please click here to view the comment. connect with kbra twitterlinkedindownload the ios appyoutube about kbra and kbra europe kbra is a full service credit rating agency registered with the u.s. securities and exchange commission as an nrsro. in addition, kbra is recognized by the national association of insurance commissioners as a credit rating provider and a certified credit rating agency (cra) by the european securities and markets authority (esma). kroll bond rating agency europe limited is registered with esma as a cra.
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