Filed by: Colorado Business Bankshares, Inc.
Commission File No. 000-24445
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: First Capital Bank of Arizona
THE FOLLOWING INFORMATION WILL BE DISSEMINATED TO EMPLOYEES
OF COLORADO BUSINESS BANKSHARES, INC.:
If you've been reading our quarterly earnings releases, you know how well we're
doing. Thanks to your hard work and dedication, we just posted an incredible 33%
increase in earnings for the third quarter. And now, we've signed an agreement
to enter the Phoenix market by acquiring First Capital Bank of Arizona.
First Capital is a $104 million four-year-old bank that serves small to mid-
sized businesses at two locations in the Phoenix metropolitan area. There are a
lot of similarities between that organization and ours - both of us compete in
rapidly growing cities and we both have created a uniquely entrepreneurial,
customer-focused environment.
Why is this exciting? First, it shows that you are part of a dynamic, growing
organization that continues to exceed industry expectations. Second, if you're
enrolled in our 401(k) or stock purchase plans - and I strongly encourage
everyone to do so - you should see the results in our stock prices.
What does this mean to your job? Clearly, our operations people will feel the
impact as we consolidate systems and begin offering more of our services to
First Capital's customers. But each of you can feel proud of the job you're
doing, as well as the important role you've played in the company's success and
our ability to make such strategic acquisitions.
I've attached the press release, if you'd like to see more information about
this exciting acquisition. You might notice that in the release, we're also
announcing plans to change the name of the holding company as of December 1.
More information on that will be coming, but for now just know that it won't
affect the names of our banks or any of our subsidiaries.
Join with me in celebrating this acquisition and the next member of the Colorado
Business Bankshares family, and thank you for doing so much to make it possible.
Filed by: Colorado Business Bankshares, Inc.
Commission File No. 000-24445
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: First Capital Bank of Arizona
[COLORADO BUSINESS BANK LOGO]
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FOR IMMEDIATE RELEASE
For more information, contact:
Steven Bangert Harold Mosanko
Chairman of the Board and CEO President and CEO
Colorado Business Bankshares, Inc. First Capital Bank of Arizona
303.293.2265 602.240.2720
Colorado Business Bankshares, Inc. and First Capital Bank of Arizona
Announce Agreement to Merge
Colorado Business Bankshares Also Announces Name Change to
Reflect Market Diversification and New Business Lines
DENVER - October 24, 2000 - Colorado Business Bankshares, Inc. (Nasdaq: COBZ),
headquartered in Denver and one of the fastest growing financial institutions of
its size in the nation, and First Capital Bank of Arizona (OTC Bulletin Board:
FCAZ), headquartered in Phoenix, announced jointly today that they have signed a
definitive merger agreement. In the merger, First Capital Bank shareholders will
receive stock of Colorado Business Bankshares.
Colorado Business Bankshares is a $610 million financial holding company
headquartered in Denver. The company, through its subsidiary Colorado Business
Bank, operates nine full-service locations in Colorado and offers trust services
and employee benefits consulting.
First Capital is a four-year-old business bank headquartered in Phoenix with
$104 million in assets and two full-service locations serving small to medium-
sized companies in the metropolitan area. The bank was founded by a group of
local investors led by Harold Mosanko, president and chief executive officer.
Mosanko worked for 25 years at Valley National Bank of Arizona, serving as the
executive vice president of the Commercial Lending Group.
The exchange ratio in the merger will depend upon the average closing price of
Colorado Business Bankshares stock for the 20 trading days ending with the third
trading day prior to the consummation of the merger. If the average closing
price is $14.50 or less, the conversion ratio will be 2.621 shares of Colorado
Business Bankshares for each share of First Capital. If the average closing
price exceeds $14.50, the conversion ratio will be determined by adding one-half
of the excess to $38.00 and dividing that sum by the average closing price. For
example, if the average closing price is $16, the price paid to First Capital
shareholders will be $38.75 per share, resulting in a conversion ratio of 2.422.
At that conversion ratio, Colorado Business Bankshares would issue approximately
1.767 million shares of its common stock, at an estimated value of $28.3
million, and would assume First Capital options for an additional 270,090 shares
of its common stock with a weighted average
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First ad - Colorado Business Bankshares Acquires First Capital
exercise price of $6.71. If the average closing price is less than $14.50, First
Capital may terminate the merger. Subject to the completion of due diligence and
shareholder and regulatory approval, the transaction is expected to be completed
early in the first quarter of 2001. The transaction will be accounted for as a
pooling of interests.
Steven Bangert, chairman and chief executive officer of Colorado Business
Bankshares, said, "First Capital's strategy is very similar to ours: we each
deliver high touch banking services to small and mid-sized businesses and high
net worth individuals in two of the most rapidly growing metropolitan areas in
the United States. Both banks have recruited an entrepreneurial, customer-
focused management team from leading financial institutions acquired by large
out-of-state banks. The First Capital acquisition will give us the platform to
execute our branching strategy in Arizona, opening new bank locations led by
experienced bankers."
"I am very pleased to introduce our customers to an exciting company, one that
has made considerable investments in talent and technology to the benefit of its
customers," said Mosanko. "Our customers will quickly notice an increase in the
number and quality of products and services we're able to provide, as well as
increased lending limits. Although we will continue to operate independently
under our own charter, joining the Colorado Business Bankshares family is
clearly a great opportunity for our customers, employees, shareholders and
community."
To reflect an increasing portfolio of diverse financial services as well as
its first venture outside of Colorado, Colorado Business Bankshares also
announced a name change to CoBiz Inc., effective December 1, 2000. "Our new
holding company name is not only a sign of our operations outside of Colorado,
but also of diversification into complementary business lines such as CoBiz
Connect, our employee benefit consulting subsidiary," Bangert said. "We will
continue to explore and develop fee-based opportunities that will allow us to
better serve the needs of our business customers and reduce our dependence on
net interest margin."
Colorado Business Bankshares is a financial holding company with $610 million
in assets headquartered in Denver that owns Colorado Business Bank, N.A., a
full-service, commercial banking institution with nine locations in Colorado:
six in the Denver metropolitan area, two in Boulder and one in Edwards (the Vail
Valley). The bank provides a broad range of sophisticated banking products and
services, including credit, cash management, investment, deposit and trust
products as well as employee benefits consulting, to its targeted customer base
of small and medium-sized businesses and high net worth individuals. With the
completion of this transaction, the company will add two locations in the
Phoenix metropolitan area and grow to approximately $715 million in assets.
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Second ad - Colorado Business Bankshares Acquires First Capital
TRANSACTION ECONOMICS
. Share determination: If the 20-day average price is less than or
equal to $14.50, 2.621 shares will be issued
for each share of First Capital. If the 20-day
average price exceeds $14.50, the conversion
ratio will be determined by adding one-half of
the excess to $38.00 and dividing that sum by
the average closing price.
. Effect on EPS: Transaction should be neutral to 2001 earnings
and accretive thereafter.
. Cost savings: Any estimated cost savings will be offset with
increases in lending staff and enhancements to
products and services.
. Accounting treatment: Pooling of interests
. Expected closing: First Quarter 2001
. Integration completion: Second Quarter 2001
. Board seats granted: 3
. Valuation metrics:* Price/2000 estimated earnings (basic) 20.2x
Price/Book 2.56x
Deposit premium 19%
*assuming $16.00 COBZ average price
The discussion in this press release contains forward-looking statements.
Although Colorado Business Bankshares and First Capital Bank believe that the
expectations reflected in the forward-looking statements are reasonable, they
can give no assurance that such expectations will prove to be correct. The
forward-looking statements involve risks and uncertainties, including a variety
of factors that may cause the combined company's actual results to differ
materially from the anticipated results or other expectations expressed in such
forward-looking statements, such as when and if the merger is consummated, the
success of Colorado Business Bankshares in integrating First Capital Bank into
its organization, the impact of interest rates and other general economic
conditions, loan and lease losses, risks related to the execution of each
company's growth strategy, the possible loss of key personnel, factors that
could affect Colorado Business Bankshares' or First Capital Bank's ability to
compete in its markets, changes in regulations and government policies and other
factors discussed in Colorado Business Bankshares' filings with the Securities
and Exchange Commission.
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Third ad - Colorado Business Bankshares Acquires First Capital
Colorado Business Bankshares will file a registration statement on Form S-4
with the SEC in connection with the proposed merger. The registration statement
will include a joint proxy statement/prospectus which will be sent to
shareholders of Colorado Business Bankshares and First Capital Bank seeking
their approval of the proposed merger. COLORADO BUSINESS BANKSHARES AND FIRST
CAPITAL BANK URGE INVESTORS AND SHAREHOLDERS TO READ THESE DISCLOSURE DOCUMENTS
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. When
filed, the registration statement and other documents filed with the SEC by
Colorado Business Bankshares can be obtained at the Internet World Wide Web site
maintained by the SEC at www.sec.gov. Shareholders of Colorado Business
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Bankshares or First Capital Bank or other investors can request a free copy of
the joint proxy statement/prospectus (after they are filed) and any other
relevant documents filed with the SEC by Colorado Business Bankshares by writing
to Colorado Business Bankshares, Inc., 821 17th St., Denver, Colorado 80202,
Attention: Richard Dalton.
Colorado Business Bankshares, First Capital Bank, their respective directors
and executive officers and certain other persons may be deemed participants in
the solicitation of proxies of Colorado Business Bankshares shareholders and
First Capital Bank shareholders. Information regarding the participants in any
solicitation of proxies from Colorado Business Bankshares shareholders is
contained in Colorado Business Bankshares' proxy statement for its 2000 annual
meeting filed with the SEC on April 19, 2000. Information regarding the
participants in any solicitation of proxies from First Capital Bank shareholders
is contained in First Capital Bank's proxy statement for its 2000 annual meeting
mailed to shareholders on April 3, 2000, a copy of which may be obtained by
calling David Denslow, Corporate Secretary of First Capital Bank, at (602) 240-
2720.
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