The US Bankruptcy Court for the Northern Division of Illinois, Eastern Division, has approved a Sale Order for the sale of all of the issued and outstanding shares of common stock of PNA Bank to Royal Financial for $1.2m.
As previously announced on November 14, 2014, Royal entered into an Asset Purchase Agreement with FLC Holding Company ("FLC"), an Illinois corporation and a registered savings and loan holding company, to acquire FLC’s wholly-owned subsidiary, PNA Bank, a federal savings bank with banking offices in Chicago and Niles, Illinois.
The acquisition remains subject to the terms and conditions set forth in the Asset Purchase Agreement and the provisions of Section 363 of the Bankruptcy Code, which included the receipt of approval of the Bankruptcy Court. Under the provisions of the Sale Order, Royal purchased the acquired assets free and clear of all liens, claims and encumbrances and will assume no liability of FLC.
Royal next intends to file the necessary bank merger applications with state and federal banking regulators seeking their approval of the proposed acquisition.
Royal expects the acquisition to close in the second quarter of calendar 2015 following the approval of bank regulators. As part of the transaction, Royal intends to merge PNA Bank with and into Royal’s wholly-owned subsidiary, Royal Savings Bank.
On a combined basis with PNA Bank, Royal will have approximately $232 million in assets, $156 million in loans and $178 million in deposits and serve the combined market area through a total of five office locations.
"We are pleased with the Court’s decision today, which removes the cloud of FLC Holding’s bankruptcy from PNA Bank and enables us to move forward with applications for regulatory approval," said Jim Fitch, Chairman of Royal Financial. "This transaction advances execution of our strategic plan to increase value for our shareholders. We are excited by this opportunity to serve PNA Bank’s customers and to welcome the staff at PNA Bank to our company."
Royal was advised in the transaction by RP Financial, LC. as financial advisor, and Vedder Price P.C. as legal counsel. FLC was advised by Adelman & Gettleman, Ltd, as legal counsel.