Moving Forward Into the US Hispanic Market
BBVA to Acquire Laredo National Bancshares, Inc. in Texas
* The transaction, with a purchase price of $ 850 million, is expected
to be accretive starting in the first year
* LNB has $ 3.4 billion in total assets, 110,000 customers and a
market share of 23% in the Texas-Mexico border region
* Hispanic population in LNB's footprint is above 5 million; Hispanics
are expected to be the fastest growing demographic group in Texas
and the US as a whole
* After the closing, LNB will become part of BBVA's new US division
that currently comprises BBVA Puerto Rico, BTS and will include
* Francisco Gonzalez, Chairman & CEO BBVA: "This transaction gives us
a top position in one of the priority markets for our US strategy"
* Jose Ignacio Goirigolzarri, President & COO BBVA: "Profitable growth
is a key element of BBVA's strategy, today and in the future"
MADRID, Spain, Sept. 21 /PRNewswire-FirstCall/ -- Banco Bilbao Vizcaya Argentaria (BBVA), based in Spain, announced today that it has reached agreement to acquire Laredo National Bancshares, Inc. (LNB), the leading financial services provider to the Hispanic market in the Texas-Mexico border area, with $ 3.4 billion in total assets and 110,000 customers. The transaction is expected to create value for BBVA's shareholders from the outset and has a purchase price of $850 million (euro 700 million), to be financed through BBVA's internal resources. With this transaction, which is expected to close during the first quarter of 2005, BBVA moves forward with its goal of becoming a leading financial services company for the Hispanic market. "We are very excited about this transaction because it gives us a top position in one of the priority markets for our US strategy," said Francisco Gonzalez, Chairman & CEO of BBVA. "This is an area with a massive Hispanic presence, more than 5 million people. In addition, approximately 38% of the border trade between the US and Mexico is done through Laredo, a business activity in which LNB has a predominant market share." "Step by step, we are firmly moving forward into the US Hispanic market, continuing our value enhancing strategy," the BBVA chairman added. "LNB's acquisition makes all the sense within BBVA's strategy, launched in 2002," said Jose Ignacio Goirigolzarri, BBVA's President & COO. "Profitable growth is a key element of BBVA's strategy, today and in the future. Value creation is our most important commitment with our shareholders." A leading franchise Laredo National Bancshares is the holding company of two banks -- The Laredo National Bank and South Texas National Bank of Laredo -- which have total assets of $3.4 billion and total deposits of $ 2.8 billion and operate through 35 branches. Laredo National Bank also owns Homeowners Loan Corporation, a nationwide residential mortgage lender with operations in 49 states, and has subsidiaries engaged in insurance and securities brokerage. With almost 1,800 employees -- 97 percent bilingual -- LNB is uniquely well positioned to be the leading financial services company in the South Texas Border region, where it has a 23% market share in deposits and currently serves a customer base of 110,000 individuals, 85 percent of Hispanic origin. Currently, LNB is expanding its core markets to adjacent regions within Texas, leveraging its ability to service the needs of the Hispanic community. Continuing its strong growth, in 2003 LNB had net income of $ 40 million, a 22% increase over the previous year, with a return on equity (ROE) of 15.4%. Strengthening the US strategy With this acquisition -- expected to close in the first quarter 2005 subject to regulatory approval in Spain and the US and other customary closing conditions- BBVA takes an important step forward in its US strategy, with the goal of developing a leading franchise in financial services for the Hispanic community. In July 2004, BBVA announced the establishment of a new business unit charged with developing its strategy for the US market. Following the acquisition, LNB will become part of BBVA's US division, which currently comprises BBVA Puerto Rico and BTS. In May 2004, BBVA announced the agreement to acquire California-based Valley Bank, which currently has six branches located in the Southern region of the State. BBVA has also a strong presence in Puerto Rico, with the fifth largest bank in the Spanish-speaking Commonwealth. BBVA Puerto Rico has an important consumer finance business, with a focus on mortgages and auto lending. BTS is the leading company in the money remittance business between the US and Mexico, with a market share of approximately 40%. Last year, Mexican residents in the US sent to their origin country more than $ 14.5 billion, according to data provided by Banco de Mexico. About BBVA BBVA is the leading financial player in the Spanish-speaking countries, both in Spain and Latin America. BBVA provides to its 35 million customers in 37 countries a full range of financial services, including commercial and wholesale banking, pension plans' management and insurance, among others. With 316.4 billion euros in total assets as of June 2004, 2.2 billion euros in net income last year -- a 29.5% increase compared to 2002 --, 85,000 employees worldwide and close to 7,000 branches, BBVA is one of the top-three leading Eurozone banks in terms of Return on Equity, Earnings Per Share growth and efficiency. Very attractive demographics prospects * Hispanics are the fastest growing demographic in the US and represent 13% of the US population * Total population in LNB's footprint is 13 million and it is expected to grow to 15 million by 2008 * The concentration of Hispanics in LNB's footprint is 34% vs. 13% in the U.S. * Household income in LNB market is expected to grow by 9% compared to 5% national average * The Hispanics are an underserved segment: only 65% have checking accounts vs. 95% of the "anglo" market Main business lines Laredo National Bank * Provides products and services to commercial and retail customers * Mainly Mexican customers (second generation and "borders"). * Other "anglo" customers in the Houston area * $1.5 Bn in loans and $2.3 Bn in deposits * 63% of LNB 2003 net income South Texas National Bank * A community bank focused on commercial and retail customers * Lower Mexican customers penetration, more "anglo" * $297 Mn in loans and $543 Mn in deposits * 15% of LNB 2003 net income Homeowners Loan Corporation * A non-prime mortgage lender based in Atlanta, GA licensed to operate in 49 states * Activity focused in the production and sales of mortgages * $1,300 Mn. loan volume is expected for 2004 * Primary origination channels direct mail and internet * 22% of LNB 2003 net income Disclaimer This document is only provided for information purposes and does not constitute, nor should it be interpreted as, an offer to sell or exchange or acquire, or an invitation for offers to buy securities issued by any of the aforementioned companies. Any decision to buy or invest in securities in relation to a specific issue must be made solely and exclusively on the basis of the information set out in the pertinent prospectus filed by the company in relation to such specific issue. Nobody who becomes aware of the information contained in this report should regard it as definitive, because it is subject to changes and modifications. This document contains or may contain forward looking statements (in the usual meaning and within the meaning of the US Private Securities Litigation Act of 1995) regarding intentions, expectations or projections of BBVA or of its management on the date thereof, that refer to miscellaneous aspects, including projections about the future earnings of the business. The statements contained herein are based on our current projections, although the said earnings may be substantially modified in the future by certain risks, uncertainty and others factors relevant that may cause the results or final decisions to differ from such intentions, projections or estimates. These factors include, without limitation, (1) the market situation, macroeconomic factors, regulatory, political or government guidelines, (2) domestic and international stock market movements, exchange rates and interest rates, (3) competitive pressures, (4) technological changes, (5) alterations in the financial situation, creditworthiness or solvency of our customers, debtors or counterparts. These factors could condition and result in actual events differing from the information and intentions stated, projected or forecast in this document and other past or future documents. 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