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Hawthorne to Acquire First Fidelity

EL SEGUNDO, CA-Hawthorne Financial Corp. has signed a definitive agreement to acquire First Fidelity Bancorp in a transaction currently valued at $68 million, nearly seven times First Fidelity's 2001 net income and 158% of tangible book value of First Fidelity Bancorp.

By Peter Landau | Updated on March 24, 2002

EL SEGUNDO, CA-Hawthorne Financial Corp. ha signed a definitive agreement to acquire First Fidelity Bancorp in a transaction currently valued at $68 million, which represents a 6.97 multiple of First Fidelity’s 2001 net income and 158% of its tangible book value.

Hawthorne Financial is the parent company of Hawthorne Savings. First Fidelity Bancorp is the parent of First Fidelity Investment and Loan. First Fidelity is a privately-owned real estate secured lender with $500 million in loan assets secured primarily by Southern California real estate, and approximately $413 million in deposits generated from its four branches. Hawthorne is a real estate secured lender with $1.8 billion in assets, and $1.2 billion in deposits generated from its nine branches in Southern California.

Hawthorne anticipates that the transaction will close in the third quarter of 2002, and that it will be accretive to its GAAP and cash earnings per share in 2002, excluding one-time charges attributable to the merger. Hawthorne expects to achieve pre-tax cost savings of approximately $1.3 million, which represents 11% of estimated total non-interest expense of First Fidelity, in the first full year of combined operations.

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