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Walnut Creek, Calif.-based BayCom acquiring New Mexico-based Bethlehem Financial


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According to Market Intelligence, April 2023

Walnut Creek, Calif.-based BayCom acquiring New Mexico-based Bethlehem Financial

Walnut Creek, Calif.-based BayCom Corp is acquiring Belen, N.M.-based Bethlehem Financial Corp. for $23.5 million in cash.

At the effective time of the merger, each Bethlehem share will be converted into the right to receive $62.00 in cash. The transaction is expected to close in the fourth quarter.

On an aggregate basis, SNL calculates that the deal value is 146.2% of common equity and tangible common equity. The price is 17.26% of deposits and 15.0% of assets.

SNL valuations for bank and thrift targets in the Southwest region between Aug. 13, 2017, and Aug. 13, 2018, averaged 184.15% of book, 194.46% of tangible book and had a median of 20.79x last-12-months earnings, on an aggregate basis.

Bethlehem unit MyBank — which serves central New Mexico through five branches in Belen, Rio Communities, Los Lunas, Albuquerque, and Mountainair — will be merged into BayCom unit United Business Bank.

As of June 30, Bethlehem had approximately $156.6 million in assets, $79.4 million in loans and $136.2 million in deposits. The combined company will have approximately $1.5 billion in total assets, $993.0 million in total loans and $1.3 billion in total deposits. United Business Bank will have 14 locations in California, two in Washington, and six in New Mexico.

BayCom will enter Valencia County, N.M., with three branches to be ranked third with a 17.16% share of approximately $581.67 million in total market deposits. The company will expand in Bernalillo County, N.M., by one branch to be ranked No. 14 with a 0.40% share of approximately $12.46 billion in total market deposits, and will also enter Torrance County, N.M., with one branch to be ranked third with a 20.75% share of approximately $111.68 million in total market deposits.

BayCom expects the deal to have "immediate and meaningful" accretion to earnings in the mid-teens range. It has a modest tangible book value dilution, with payback in three years. Internal rate of return is greater than 20%.

The deal has a termination fee of $1.5 million, payable by Bethlehem.

BayCom and United Business Bank were assisted by Gary Steven Findley & Associates and The Findley Group for legal services and FIG Partners for investment banking services and a fairness opinion. Bethlehem and MyBank were assisted by Philip K. Smith of Gerrish Smith Tuck Consultants and Attorneys for legal services and Tom Mecredy of Vining Sparks for investment banking services and fairness opinion.

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