News by SB Informer

Bank of America Acquires LaSalle Bank

SB Informer
Monday, April 23, 2007; 03:53 AM

Bank of America Corporation has announced a definitive agreement to purchase ABN AMRO North America Holding Company, parent of LaSalle Bank Corporation and its subsidiaries, from ABN AMRO Holding NV. The combination of LaSalle and Bank of America creates a leading banking franchise in metropolitan Chicago, the No. 3 banking market in the United States, and in Michigan.

Bank of America will pay US$21 billion in cash to ABN AMRO. After a return of US$5 billion in excess capital, the net cost is US$16 billion.

The purchase will significantly deepen Bank of America's Chicago presence and add LaSalle's 17,000 commercial banking clients, 1.4 million retail customers, 411 banking centers and 1,500 ATMs in the Chicago area, Michigan and Indiana. It also will mark Bank of America's retail branch entry in Michigan, where it will have 264 offices and be the largest bank with a 23 percent deposit market share. LaSalle also has six banking offices in Indiana.

In the last four years, Bank of America has grown its retail presence in Chicago from a single financial center to 56 locations. Once combined with LaSalle's 141 Chicago area offices, Bank of America will have more than 14 percent of the deposit market share in metropolitan Chicago. LaSalle is a top-20 U.S. bank holding company, with US$113 billion total assets.

"In LaSalle, we see a compelling opportunity to fill in a key gap in our national franchise and build relationships with thousands of new customers in retail, private banking, wealth management and commercial and corporate banking," said Kenneth D. Lewis, Bank of America's chairman and chief executive officer. "LaSalle customers will share in the most extensive retail franchise in the nation, have access to a leading innovator in financial services and will benefit from Bank of America's commitment to the communities it serves."

Commercial and corporate clients will benefit from greater access to global capital markets and enhanced investment banking and global treasury services capabilities.

Bank of America will be able to deliver more services including innovative products such as Keep the Change, Business 24/7 and $0 Online Equity Trades to complement LaSalle's strong existing capabilities. As a result, Bank of America expects increased revenue from additional sales over time.

"Bank of America is a tremendous organization for which I have the utmost respect," said LaSalle Bank Corporation President and Chief Executive Officer Norman R. Bobins. "I look forward to working with them."

In the Community

In the community, LaSalle has consistently demonstrated its involvement in the markets it serves. Bank of America also is committed to Chicago and since 1995 has donated more than US$30 million in Illinois, mostly in Chicago, to organizations such as the United Way, the Chicago Community Foundation and Neighborhood Housing Services. Bank of America has pledged US$1.5 billion nationally in philanthropic giving over 10 years, including US$200 million in 2006.

In 2006, Bank of America donated US$3.9 million in Illinois, a 28 percent increase from a year earlier. Last month, Bank of America gave US$1 million to the Chicago Public Library to fund technology improvements in library branches and provide assistance to job seekers and others without Internet access.

Bank of America intends to continue its support of the LaSalle Bank Chicago Marathon and key sports sponsorships, such as being the official bank of Major League Baseball's Chicago White Sox. Bank of America is the official bank of baseball. Bank of America also looks forward to introducing its philanthropic programs in Michigan markets.

Bank of America is a leader in community development, with a national goal of US$750 billion over a 10-year period. It is committed to providing financial products and services in low to moderate income areas it serves.

Financial Terms and Assumptions

The purchase is expected to be immediately accretive to earnings per share.

Bank of America expects US$800 million in after-tax cost savings in the transaction. Half of those would come in 2008 and the remainder would be realized in 2009.

Bank of America would have an estimated US$800 million in after-tax restructuring costs.

The agreement has been approved by Bank of America's board of directors and ABN AMRO's supervisory board, and is subject to customary regulatory approvals. The purchase is expected to comply with all applicable legal and regulatory requirements. Closing is expected in late 2007 or early 2008.

Bank of America was advised in the transaction by Banc of America Securities and the law firm of Wachtell, Lipton, Rosen & Katz. ABN AMRO was advised by UBS and the law firm of Davis Polk & Wardwell.

Note: Bank of America management will present transaction details in an 8:30 a.m. Webcast. The presentation and Webcast can be accessed on the Bank of America's Investor Relations Web site at http://investor.bankofamerica.com.

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