RED BLUFF, California - The Board of Directors of MVB (OTCBB:MIVB) today announced the termination of the Definitive Agreement with Western Sierra Bancorp, citing a disagreement over adjustments to the consideration to be paid. Under the terms of the Definitive Agreement, MVB would have become a wholly owned subsidiary of the Western Sierra holding company and Mid Valley shareholders would have received a combination of cash and shares of Western Sierra Bancorp.
Western Sierra proposed adjustments to the price because of deterioration in the condition of a limited number of agricultural credits. The problem credits had been previously identified by both institutions and MVB believes that it has established adequate loan loss reserves concerning the loans in question.
MVB president John Dickerson stated, "We still believe that the merger of our two institutions would have been a very synergistic and profitable combination. However, our first obligation is to make sure that our shareholders are treated fairly. In that context, we could not agree to the proposed adjustments.
With the termination of the Definitive Agreement, MVB agreed to pay Western Sierra Bancorp $75,000 to offset a portion of their expenses. An additional $250,000 would be payable if Mid Valley enters into a subsequent transaction with another party within twelve months.
The Board of Directors and management of MVB have determined that it is in the best interest of its shareholders, employees and the local community to operate as an independent entity while it completes the task of improving the problem assets and returning the bank to the level of profitability it has experienced over the last several years.
MVB is a locally owned, community bank serving upstate California from five full service offices in Red Bluff, Redding, Corning and Chico. The bank focuses on real estate construction lending and commercial lending to the business and professional community. Consumer financial services, as well as various investment and insurance products are also available. More information about the bank can be obtained at its website, www.midvalleybank.com. MVB stock is listed on the OTCBB under the stock symbol MIVB.
This news release includes forward-looking statements about MVB's financial condition, results of operations, plans, objectives and future performance. A number of factors, many of which are beyond the control of MVB, could cause actual results to differ materially from those in the forward-looking statements.