Dunmore, Pa.-based Fidelity D & D Bancorp Inc. agreed to acquire Bangor, Pa.-based MNB Corp. for $78.5 million, or $69.30 on a per-share basis, based on Fidelity's 20-day average closing price as of Dec. 6.
MNB shareholders will receive 1.039 Fidelity D & D Bancorp common share for each MNB common share that they own as of the closing date. The deal is expected to close in the second quarter of 2020.
MNB unit Merchants Bank of Bangor will merge into Fidelity Deposit and Discount Bank. Two representatives from MNB will join the boards of Fidelity D & D Bancorp and the unit, respectively, at the closing of the deal.
S&P Global Market Intelligence calculates the deal is 200.4% of common equity and 200.4% of tangible common equity and 20.9x earnings, on an aggregate basis. The deal value is 19.06% of assets, 21.95% of deposits and the tangible book premium to core deposits ratio is 11.56%.
S&P Global Market Intelligence valuations for bank and thrift targets in the Mid Atlantic region between Dec. 10, 2018, and Dec. 10, 2019, averaged 140.58% of book and 148.41% of tangible book and had a median of 15.66x last-12-months earnings, on an aggregate basis.
Based on financial results as of Sept. 30, the combined company would have pro forma total assets of approximately $1.46 billion, total deposits of approximately $1.28 billion and loans of approximately $1 billion. Once the deal closes, Fidelity Deposit and Discount Bank will operate 21 retail community banking offices in northeastern and eastern Pennsylvania.
Fidelity D & D Bancorp will enter Northampton County, Pa., with nine branches to be ranked seventh with a 5.71% share of approximately $6.19 billion in total market deposits.
Bybel Rutledge LLP is the legal counsel and Commonwealth Advisors is the financial adviser to Fidelity D & D Bancorp. Mette Evans & Woodside is legal counsel, and Olsen Palmer LLC is the financial adviser to MNB Corp.
As of Sept. 30, Fidelity Deposit and Discount Bank had total assets of $1.01 billion and Merchants Bank of Bangor had total assets of $412.8 million.