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New Jersey-based First Bank to acquire Grand Bank in $19.4M stock deal

Hamilton, N.J.-based First Bank is buying New Jersey peer Grand Bank NA in a stock transaction valued at approximately $19.4 million, based on the buyer's March 19 closing price of $11.43 per share.

Under the terms of the deal, Grand Bank shareholders will receive 3,262.956 First Bank common shares for each Grand Bank common share outstanding in an all-stock exchange. First Bank expects to issue approximately 1.7 million new shares to complete the transaction. The deal value equates to about 87.5% of Grand Bank's tangible book value as of Dec. 31, 2018, according to a merger release.

According to S&P Global Market Intelligence's calculations, on an aggregate basis, the deal value is 88.52% of common equity and 90.67% of tangible common equity. It represents 9.98% of assets and 12.15% of deposits.

S&P Global Market Intelligence valuations for bank and thrift targets in the Mid-Atlantic region between March 19, 2018, and March 19, 2019, averaged 144.84% of book and 149.94% of tangible book and had a median of 22.70x last-12-months earnings, on an aggregate basis.

The deal is expected to be completed in the third quarter.

Grand Bank has approximately $197 million in assets, $163 million in loans and $162 million in deposits as of Dec. 31, 2018. The bank has two full-service locations. After the acquisition, First Bank will have approximately $1.9 billion in assets and 18 branches located in seven New Jersey counties and two counties in eastern Pennsylvania.

The transaction is expected to further strengthen First Bank's balance sheet through loan portfolio diversification and provides expanded access to cost-effective retail deposit customers and funding, First Bank President and CEO Patrick Ryan said in the merger release. He added that the transaction is expected to be immediately accretive to First Bank's earnings per share, and that the bank expects minimal dilution to its tangible book value.

FIG Partners LLC and Boenning & Scattergood acted as financial advisers to First Bank while Sandler O'Neill & Partners LP acted as financial adviser to Grand Bank.

Covington & Burling LLP provided legal counsel to First Bank while Windels Marx Lane & Mittendorf LLP provided legal counsel to Grand Bank.