Humboldt Bancorp announced that the definitive agreement to sell its proprietary merchant bankcard operations to iPayment Holdings, Inc., originally announced on July 22, was terminated.
Humboldt announced on September 13 that the transaction had not closed as scheduled on August 30 and that both parties were continuing efforts to complete the transaction. On October 3, an amendment to the purchase agreement was executed by both parties that provided for, among other things, the payment of $1 million to Humboldt as a non-refundable deposit toward the purchase price. This payment was received by Humboldt and will be reflected in the Company’s fourth quarter operating results.
“The proposed transaction was negotiated to provide for both the realization of value for our shareholders and job preservation for about 80 employees,” commented Robert M. Daugherty, President & Chief Executive Officer. “We have received other expressions of interest as a result of our September 13 announcement and are reviewing all strategic options for this business with our investment banker.”
Humboldt’s proprietary merchant bankcard division provides services to over 10,000 merchants and provides a consistent and significant source of non-interest revenue, with minimal fraud losses. For the six months ended June 30, 2002, Humboldt recognized approximately $7.6 million in non-interest revenue from its proprietary merchant bankcard operation and incurred net fraud losses of $140,000.
Humboldt Bancorp had total assets of $984 million as of June 30, 2002. Through its principal operating subsidiary, Humboldt Bank, it offers business and consumer banking services through 23 banking centers, principally in Northern California, including its Tehama Bank and Capitol Valley Bank divisions.