Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: James B. Jaqua
Hemet Bancorp
(909) 784-5771 Ext. 101
HEMET BANCORP ANNOUNCES DEFINITIVE MERGER AGREEMENT
WITH HEMET FINANCIAL GROUP, INC.
RIVERSIDE, California (May 23, 2002) -- Hemet Bancorp (OTCBB: HMET.OB) announced
today that it has entered into a definitive merger agreement with Hemet
Financial Group, Inc. pursuant to which Hemet Financial Group will be merged
with and into Hemet Bancorp. Shareholders of Hemet Bancorp as of the effective
time of the merger will receive the right to receive a cash payment in the
amount of $54.00 per share of Hemet Bancorp common stock.
As part of a private financing by Hemet Financial Group, some shareholders of
Hemet Bancorp, including all of its executive officers and directors, will
execute promissory notes in favor of Hemet Financial Group in exchange for newly
issued shares of Hemet Financial Group prior to the completion of the merger. In
the merger, stockholders of Hemet Financial Group will receive shares of Hemet
Bancorp. Accordingly, these shareholders will remain shareholders of Hemet
Bancorp following the merger. The cash consideration payable to these
shareholders in the merger will automatically be applied to retire their
promissory notes in favor of Hemet Financial Group.
It is currently expected that the proposed merger will occur during the third
quarter of 2002, if approved by the shareholders of Hemet Bancorp and by the
stockholders of Hemet Financial Group. The consummation of the merger is, among
other things, contingent upon the receipt of required approvals from bank and
securities regulatory agencies and the successful completion of the
above-referenced private financing by Hemet Financial Group. If successful,
after the consummation of the merger, Hemet Bancorp will no longer be a public
reporting company and will make an election to be taxed under Subchapter S of
the Internal Revenue Code for the calendar year 2003.
Hemet Financial Group is a newly formed Nevada corporation that was formed
solely for the purpose of effecting the merger transaction set forth in the
merger agreement. Currently, Hemet Financial Group has only one stockholder, but
prior to the completion of the merger transaction, Hemet Financial Group will
have approximately 75 stockholders, among whom are expected to be all of Hemet
Bancorp's executive officers and directors.
Hemet Bancorp previously announced its intention to conduct an annual meeting of
shareholders to elect directors in the second quarter of 2002. As a result of
the proposed merger, Hemet Bancorp will postpone its annual meeting
indefinitely, pending the outcome of the vote on the proposed merger at an
upcoming special meeting.
ABOUT HEMET BANCORP
Hemet Bancorp is a bank holding company that was incorporated in January 2001 in
the State of California for the purpose of acquiring and holding all of the
outstanding shares of capital stock of its wholly owned subsidiary, The Bank of
Hemet. Hemet Bancorp acquired all of the outstanding shares of capital stock of
The Bank of Hemet on November 21, 2001. The Bank of Hemet is a
California-chartered bank that operates five branches in communities located in
the Inland Empire areas of Southern California.
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WHERE TO FIND OTHER INFORMATION
Hemet Bancorp, Hemet Financial Group and their affiliates will file with the SEC
a Schedule 13E-3, and Hemet Bancorp will file a proxy statement on Schedule 14A.
The Schedule 14A proxy statement, as well as other relevant documents concerning
the proposed transaction, will be used by Hemet Bancorp in connection with its
solicitation of shareholder approval for the merger transaction proposed by
Hemet Bancorp.
Hemet Bancorp shareholders are urged to read the proxy statement and Schedule
13E-3 regarding the proposed transaction when they become available, and any
other relevant documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important information.
When a proxy statement and Schedule 13E-3 become available, shareholders of
Hemet Bancorp will be able to obtain a free copy of the proxy statement and
Schedule 13E-3, as well as other filings containing information about Hemet
Bancorp, at the SEC's Internet site (http://www.sec.gov). Shares of the capital
stock of Hemet Financial Group are currently not registered under the Securities
Exchange Act of 1934 and therefore Hemet Financial Group does not file reports
with the SEC. Copies of the proxy statement and Schedule 13E-3 (if and when
available) can also be obtained, without charge, by directing a request to:
Hemet Bancorp, Cathy Frei, 3715 Sunnyside Drive, Riverside, California 92506
(909-784-5771, ext. 113).
Approval of Hemet Bancorp's shareholders is required for the transactions
contemplated by the merger agreement. Hemet Bancorp and its executive officers
and directors may be deemed to be participants in the solicitation of proxies
from Hemet Bancorp's shareholders with respect to the approval of the
transactions contemplated by a merger agreement. Information regarding the
executive officers and directors of Hemet Bancorp, including their identity and
a description of their direct and indirect interests in Hemet Bancorp, is set
forth in Hemet Bancorp's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001 that was filed with the SEC on March 29, 2002, which is
available at the SEC's Internet site (http://www.sec.gov).
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INFORMATION ABOUT FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve a number of
risks and uncertainties. These forward-looking statements are made pursuant to
the "safe-harbor" provisions of the Private Securities Litigation Reform Act of
1995 and are made based on management's current expectations or beliefs as well
as on assumptions made by, and information currently available to, management.
Neither Hemet Bancorp nor Hemet Financial Group assumes any obligation to update
any of these statements.
While Hemet Bancorp and Hemet Financial Group have entered into a definitive
merger agreement, there can be no assurance that the parties will complete the
merger transaction. In the event that that the companies do not receive the
necessary shareholder or regulatory approvals or fail to satisfy the other
conditions to closing, the transaction will terminate. Among the conditions to
closing is the successful completion by Hemet Financial Group of the private
financing on the terms set forth in the merger agreement. For a detailed
discussion of other risk factors that could affect Hemet Bancorp's business,
please refer to the public filings made by Hemet Bancorp with the SEC, including
"Forward Looking Statements" in Hemet Bancorp's Annual Report on Form 10-K for
the fiscal year ended December 31, 2001 that was filed with the SEC on March 29,
2002.
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