Ann Arbor, Mich.-based ArborBancorp Inc. agreed to acquireBirmingham, Mich.-based BirminghamBloomfield Bancshares Inc. in an all-cash transaction valued at approximately$33.3 million.
Under the terms of the in-state deal, shareholders of BirminghamBloomfield Bancshares will receive $16.50 per share in cash for each share of outstandingBirmingham Bloomfield Bancshares common stock. The $33.3 million deal value includespaying off outstanding warrants and stock options.
On a per-sharebasis, SNL calculates the deal value to be 174.4% of book and tangible book and15.9x last-12-months earnings. The price is 12.71% of deposits and 11.60% of assets,and the tangible book premium to core deposits ratio is 7.16%.
For comparison,SNL valuations for bank and thrift targets in the Midwest region between July 20,2015, and July 20, 2016, averaged 134.23% of book, 143.02% of tangible book andhad a median of 19.00x LTM earnings, on a per-share basis.
The one-daypremium is 79.74% based on Birmingham Bloomfield Bancshares' July 19 closing priceof $9.18. The one-month premium is 83.54% based on Birmingham Bloomfield Bancshares'June 20 closing price of $8.99.
The combined organization is expected to have eight locationsin Washtenaw, Wayne and Oakland counties in Michigan. Arbor Bancorp anticipatesthe transaction to be accretive to earnings per share by approximately 15%.
Arbor BancorpInc. will enter Oakland County, Mich., with one branch to be ranked No. 16 witha 0.44% share of approximately $47.09 billion in total market deposits.
The transaction is expected to be completed by year-end, subjectto regulatory approvals and the approval of the shareholders of Birmingham BloomfieldBancshares.
After the transaction is completed, Bank of Birmingham President Rob Farr will serve as presidentfor the Birmingham district.
Keefe Bruyette & Woods Inc. and Varnum LLP advised ArborBancorp. Donnelly Penman & Partners Inc. and Warner Norcross & Judd LLPadvised Birmingham Bloomfield Bancshares.