(7 June 2010 – USA) National Australia Bank’s wholly owned subsidiary Great Western Bank has acquired the struggling Nebraska bank TierOne for US$76 million.The bank announced the takeover of certain assets and liabilities from the Federal Deposit Insurance Corporation (FDIC) for a cash payment of approximately US$76 million (A$92 million) this morning on the ASX.
The acquisition includes all of TierOne’s approximate US$1.9 billion in deposits and US$1.9 billion in loans under agreement where the FDIC will absorb 80 percent of all credit losses arising on the loan portfolio and related assets.
The loss sharing agreement has a term of ten years for residential mortgages and five years for all other loans.
NAB’s group executive of Asia, New Zealand and the United States, Andrew Thorburn, said in a statement that the acquisition is aligned with the bank’s US strategy and is a financially attractive bolt on opportunity.
It increases Great Western’s distribution and customer base in selected states that together have an agricultural output greater than Australia’s.
The cash payment of US$76 million includes a deposit premium, an asset discount and net assets acquired.