Wallkill, N.Y.-based Wallkill Valley Federal Savings and Loan Association agreed to acquire Walden, N.Y.-based Hometown Bancorp Inc. (MHC) in an all-cash deal.
Wallkill Valley will pay $3.01 per share to all public shareholders, excluding Hometown Bancorp MHC. According to SNL data, Hometown Bancorp MHC owns 56.30% stake in the company.
On a per-share basis, SNL calculates the deal value to be 84.6% of book and 88.7% of tangible book. The price is 6.72% of deposits and 5.70% of assets, and the tangible book discount to core deposits ratio is 1.00%.
For comparison, SNL valuations for bank and thrift targets in the Mid Atlantic region between Dec. 16, 2015 and Dec. 16, 2016 averaged 130.28% of book, 137.14% of tangible book and had a median of 20.51x last-12-months earnings, on a per-share basis.
The one-day premium is 5.61% based on Hometown Bancorp's Dec. 15 closing price of $2.85. The one-month premium is 20.4% based on Hometown Bancorp's Nov. 16 closing price of $2.50.
Wallkill Valley expects the deal to enhance its presence in Orange County. Hometown Bancorp Inc. had approximately $123 million in total assets, $106 million in gross loans and $104 million in total deposits as of Sept. 30. Wallkill Valley reported $193.7 million in total assets as of Sept. 30.
The combined entity expects to have more than $320 million in total assets, gross loans of $268 million and total deposits of $256 million, with eight branches throughout Orange and Ulster counties.
Based on data collected by SNL, Wallkill Valley Federal Savings and Loan Association will expand in Orange County, N.Y., by four branches to be ranked No. 11 with a 1.97% share of approximately $7 billion in total market deposits.
The deal is subject to regulatory and Hometown Bancorp Inc.'s shareholders' approval, along with the approval from the members of Hometown Bancorp MHC and Wallkill Valley. The companies expect to close the transaction by the third quarter of 2017.
Sandler O'Neill & Partners LP is serving as financial adviser to Wallkill Valley, while Hinman Howard & Kattell LLP is acting as legal adviser. FinPro Capital Advisors Inc. served as financial adviser to Hometown Bancorp Inc. and rendered a fairness opinion, while Luse Gorman PC is serving as legal adviser.
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