Hamilton, N.J.-based First Bank agreed to acquire Doylestown, Pa.-based Bucks County Bank in an all-stock transaction valued at approximately $27.2 million.
Bucks County shareholders will receive 0.98 First Bank share for each share held. First Bank will issue approximately 2.4 million new common shares for the deal, which is valued at $11.07 per share, or around $27.2 million, based on First Bank's closing price of $11.30 per share on March 28.
SNL calculates the deal value to be 124.4% of both book and tangible book and 46.6x earnings, on an aggregate basis. It is also 18.69% of deposits and 13.73% of assets. Its tangible book premium-to-core-deposits ratio is 5.11%. The deal carries one-day and one-month premiums of 35.71%, based on Bucks County Bank's closing price of $8.16 on March 28 and March 1.
For comparison, offers for bank and thrift targets in the mid-Atlantic between March 29, 2016, and March 29, 2017, averaged 140.04% of book, 143.29% of tangible book and had a median of 21.73x last-12-month earnings, on an aggregate basis. On a per-share basis, they averaged 131.89% of book, 135.80% of tangible book and had a median of 21.27x LTM earnings.
As of Dec. 31, 2016, Bucks County Bank had approximately $198 million in assets, $179 million in loans and $145 million in deposits, according to the news release. In the same time period, First Bank reported total assets of $1.07 billion.
Following the merger, the combined entity will have approximately $1.3 billion in assets with 14 branches located throughout New Jersey and Pennsylvania. First Bank will expand in Bucks County by four branches, to be ranked No. 21 with a 0.95% share of approximately $17.83 billion in total market deposits. John Harding — chairman, president and CEO of Bucks County Bank — will join First Bank as market president and director.
The transaction is expected to be 8% accretive to full-year 2018 EPS, with tangible book value dilution of 1.8% earned back in three years, according to an April 25 presentation made by First Bank. Key pro forma assumptions include cost savings at 40% of Bucks County Bank's noninterest expense, and 1.25% core deposit intangible amortized over 10 years using sum-of-years digits methodology.
Also, the combined entity's board will include two directors from Bucks County Bank, First Bank said in the same presentation.
The deal, subject to shareholders and regulatory approvals, is expected to close in the third quarter.
Sandler O'Neill & Partners LP acted as financial adviser and Covington & Burling LLP provided legal counsel to First Bank. Hovde Group LLC acted as financial adviser and Curtin & Heefner LLP provided legal counsel to Bucks County Bank.
SNL data is an offering of S&P Global Market Intelligence.