AltaPacific Bancorp fka ABNK

[56Chevy]

Within the 2012 Year End Performance Results recently put out by the company was a one time Bargain Purchase Gain totaling $936K. It was the result of, and in connection with, the merger with Stellar Business Bank.

Merging with, or acquiring other banks, is a good strategic things for a bank(s) to do (economies of scale / more assets/ more customers/ deposits/ loans/etc. etc.) but there is also the possibility of an immediate windfall on the acquiring banks' net income for the year.

Re: Bargain Purchase Gain in general - If the seller is not distressed and the acquisition is orderly, a bargain purchase gain would be a rare occurrence. An example of a transaction that could result in a bargain purchase gain is the purchase of a bank with assistance from the Federal Deposit Insurance Corporation (FDIC). In this case, the seller, which is the FDIC, has a limited period of time to find a buyer and often makes decisions based on the safety and soundness of the overall banking system rather than on maximizing the value of the individual transaction. This contrasts with the purchase of an entity that is in Chapter 11 bankruptcy proceedings. In this case, the bankruptcy court has an obligation to try to maximize the recovery for the entity’s creditors, so the acquisition would normally comprise an orderly transaction.

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