MINNEAPOLIS & AVON, Colo.--(BUSINESS WIRE)--June 1, 2006--U.S.
Bancorp (NYSE:USB) and Vail Banks, Inc. (Nasdaq:VAIL) announced today
the signing of a definitive agreement for U.S. Bancorp to acquire Vail
Banks, Inc., the parent company of WestStar Bank. This acquisition
will give U.S. Bancorp's lead bank, U.S. Bank National Association, 24
additional branch locations in Colorado. Vail Banks, Inc.,
headquartered in Avon, Colorado, had consolidated assets of $705
million and $557 million in deposits, as of March 31, 2006.
Richard K. Davis, president and chief operating officer of U.S.
Bancorp, stated, "This transaction will expand U.S. Bank's footprint
and distribution in rapidly growing and demographically attractive
community markets in Western Colorado and add to our existing base in
Denver. We recognize this as a great opportunity for growth by
offering our new customers U.S. Bank's outstanding service and an
industry-leading mix of consumer products. We have been very
successful over the years with fill-in market acquisitions of this
type and view the integration related to this acquisition as low risk.
U.S. Bank and WestStar Bank have similar community banking models that
will help ensure a smooth transition."
Terms of the agreement include a total cash purchase price of
approximately $98.6 million, or $17.00 for each share of Vail Banks,
Inc. common stock, which represents a premium to core deposits of 13.7
percent. This transaction is anticipated to be accretive to U.S.
Bancorp earnings in 2007.
Vail Banks' board of directors has approved the merger agreement
and will recommend the approval of the transaction by Vail Banks'
shareholders. Completion of the transaction, which is currently
expected to occur in the fourth quarter of 2006, is contingent upon
customary closing conditions, including regulatory approval and the
approval of Vail Banks' shareholders, who will be asked to vote on the
proposed transaction at a special meeting that will be held on a date
to be announced.
"We are very pleased to have the opportunity for our franchise to
become a part of U.S. Bank's growth plans in Colorado," stated Vail
Banks Chairman E.B. Chester. "Having explored strategic alternatives
to create value for our shareholders, we believe that this is the best
choice for our shareholders. We have an outstanding group of
associates who will now be able to offer our customers a full suite of
competitive banking services."
WestStar Bank is a small and middle market commercial bank
primarily focused on commercial real estate, construction and small
business lending. The 24 WestStar Bank branches consist of 20
locations in the Western Slope region of Colorado and four branches in
the Denver area. Once the merger is completed U.S. Bank will have more
than 135 branch locations and total deposits of approximately $7
billion in Colorado. This transaction will significantly improve U.S.
Bank's footprint in Western Colorado.
Following the completion of this acquisition, the WestStar Bank
locations will become U.S. Bank branches. This acquisition also
includes 21 ATM locations that will increase U.S. Bank's ATM network
in Colorado to more than 250 convenient locations.
Wachtell, Lipton, Rosen & Katz advised U.S. Bancorp. Allen &
Company LLC and Hogan & Hartson L.L.P. advised Vail Banks.
About Vail Banks, Inc.
Vail Banks, Inc., through its subsidiary WestStar Bank, has 24
banking offices in 19 communities in Colorado, including Aspen, Avon,
Breckenridge, Cedaredge, Delta, Denver, Dillon, Edwards, Estes Park,
Frisco, Fruita, Glenwood Springs, Granby, Grand Junction, Gypsum,
Montrose, Norwood, Telluride and Vail. For additional information on
Vail Banks, visit its web site at www.weststarbank.com.
About U.S. Bancorp
U.S. Bancorp, with assets of $210 billion, is the 6th largest
financial holding company in the United States. The company operates
2,430 banking offices and 4,941 ATMs, and provides a comprehensive
line of banking, brokerage, insurance, investment, mortgage, trust and
payment services products to consumers, businesses and institutions.
U.S. Bancorp is the parent company of U.S. Bank. Visit U.S. Bancorp on
the web at www.usbank.com.
This news release contains forward-looking statements about U.S.
Bancorp and Vail Banks, Inc. Statements that are not historical or
current facts, including statements about beliefs and expectations,
are forward-looking statements. These statements often include the
words "may," "could," "would," "should," "believes," "expects,"
"anticipates," "estimates," "intends," "plans," "targets,"
"potentially," "probably," "projects," "outlook" or similar
expressions. These forward-looking statements cover, among other
things, anticipated future revenue and expenses and the future plans
and prospects of U.S. Bancorp and Vail Banks, Inc. Forward-looking
statements involve inherent risks and uncertainties, and many factors
could cause actual results to differ materially from those
anticipated, including those described in the Annual Report on Form
10-K for the year ended December 31, 2005, of each of U.S. Bancorp and
Vail Banks, Inc., which you should read carefully, as well as the
companies' other filings with the Securities and Exchange Commission
(SEC). Forward-looking statements speak only as of the date they are
made, and neither U.S. Bancorp nor Vail Banks, Inc. undertakes any
obligation to update them in light of new information or future
Additional Information about the Merger and Where to Find It
This communication is being made in respect of the proposed merger
transaction involving U.S. Bancorp and Vail Banks, Inc. In connection
with the transaction, Vail Banks will file a proxy statement with the
SEC. Shareholders are urged to read the proxy statement when it
becomes available because it will contain important information about
the proposed transaction.
The final proxy statement will be mailed to Vail Banks
shareholders of record at the record date for the special meeting of
the shareholders to be held to approve the proposed transaction. In
addition, the preliminary and final proxy statements and other
relevant documents will be available free of charge at the SEC's
Internet Web site, www.sec.gov. When available, the preliminary and
final proxy statement and other relevant documents also may be
obtained for free at Vail Banks' web site, www.weststarbank.com, or by
contacting Ray Verlinde, SEVP and chief administrative officer, or
Lisa Dillon, vice chairman, Vail Banks, at telephone number (970)
Vail Banks and its directors and officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies in respect to the proposed transactions. Vail
Banks' shareholders may obtain information regarding the identity of
each participant and a description of each participant's direct or
indirect interest in the solicitation from Vail Banks' proxy
statements and annual reports on Form 10-K previously filed with the
SEC and Vail Banks' proxy statement relating to the proposed
transaction, when it becomes available.
CONTACT: U.S. Bancorp/Media
Steve Dale, 612-303-0784
Judith T. Murphy, 612-303-0783
Lisa M. Dillon, 970-476-2002
Raymond E. Verlinde, 970-328-9700
SOURCE: U.S. Bancorp