Cambridge, Mass.-based Cambridge Bancorp, the holding company of Cambridge Trust Co., is acquiring Portsmouth, N.H.-based Optima Bank & Trust Co. in a cash-and-stock deal valued at approximately $67 million in the aggregate, based upon Cambridge Bancorp's closing price of $85.61 as of Dec. 4.
Under the terms of the deal, each common share of Optima Bank will be exchanged for either 0.3468 common share of Cambridge Bancorp or $32.00 in cash, subject to customary proration procedures that will result in an aggregate stock and cash consideration mix of 95% and 5%, respectively.
The transaction, on a pro forma basis, is expected to be approximately 3.6% accretive to Cambridge Bancorp's 2020 earnings per share, and approximately 3.8% dilutive to tangible book value per share with an earnback period of about 3.4 years.
On an aggregate basis, SNL calculates that the deal value is 196.9% of book and tangible book, and 28.3x earnings. It is 12.38% of assets, 13.28% of deposits and the tangible book premium-to-core deposits ratio is 9.87%.
SNL valuations for bank and thrift targets in the Northeast region between Dec. 5, 2017, and Dec. 5, 2018, averaged 174.72% of book, 171.47% of tangible book and had a median of 39.56x last-12-months earnings, on an aggregate basis.
In New Hampshire, Cambridge Bancorp will expand in Hillsborough County by one branch to be ranked No. 14 with a 0.43% share of approximately $11.71 billion in total market deposits, in Rockingham County by four branches to be ranked seventh with a 5.31% share of approximately $7.86 billion in total market deposits, and in Strafford County with one branch to be ranked 10th with a 0.33% share of approximately $1.94 billion in total market deposits.
Daniel Morrison, chairman, president and CEO of Optima Bank, as well as other key members of the Optima Bank team, will remain with Cambridge Bancorp. Morrison will also join the board of directors of both Cambridge Bancorp and Cambridge Trust.
The deal is expected to close in the second quarter of 2019.
As of Sept. 30, Optima Bank had approximately $524 million of total assets, $466 million of loans and $489 million of deposits, according to the press release. Cambridge Bancorp, as of Sept. 30, had about $1.99 billion in assets, according to SNL data.
The combined company, based on financials as of Sept. 30, will have over $2.5 billion in assets, $1.9 billion in gross loans, $2.2 billion in deposits and $3.2 billion of wealth management assets upon completion of the transaction, according to the release.
Keefe Bruyette & Woods Inc. served as financial adviser and provided a fairness opinion to Cambridge Bancorp, while Hogan Lovells US LLP served as its legal counsel. Sandler O'Neill & Partners LP served as financial adviser and provided a fairness opinion to Optima Bank, while Goodwin Procter LLP served as its legal counsel.
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