From time to time, San Mateo, Calif.-based United American Bank had been evaluating the merits of an M&A deal.
It was not until Aug. 9, 2017, however, that the company's M&A committee directed Sandler O'Neill to contact 16 companies that might be interested in pursuing a merger.
One company that was not contacted by Sandler O'Neill reached out to the agency expressing interest in pursuing a deal with United American. That company was allowed the chance to conduct limited due diligence, but it did not submit a proposal.
Out of the 16 contacted companies, six executed nondisclosure agreements and conducted limited due diligence. Of these, two submitted nonbinding indications of interest, including San Jose, Calif.-based Heritage Commerce Corp.
In September 2017, United American's M&A committee reviewed the two proposals and suggested that the company's board approve Heritage Commerce's proposal. Heritage Commerce has proposed an all-stock deal with an exchange ratio of 2.1644 shares of Heritage Commerce's common stock for every United American common share held.
In October of that year, Heritage Commerce's legal adviser, Buchalter, delivered an initial draft of the merger agreement. Under the agreement, ATBancorp, which owns around 83% of United American, would be a party to the merger agreement.
Negotiations continued throughout the next couple of months, particularly revising the merger agreement.
On Jan. 10, 2018, the companies agreed to execute the merger agreement. United American directors and executives, as well as ATBancorp, agreed to vote in favor of the merger.
Before markets opened the following day, Jan. 11, both companies announced the deal.