First Bank and Delanco Bancorp Inc. made a deal that will merge Delanco Federal Savings Bank into First Bank.
The stock transaction is valued at about $13.5 million, and was approved unanimously by both boards. It’s expected to be completed in first quarter of next year.
Delanco has locations in Delanco and Cinnaminson. First Bank is headquartered in Hamilton Township, Mercer County.
Following the merger and its recent acquisition of Bucks County Bank, First Bank will have approximately $1.6 billion in assets, with 16 branches located New Jersey and eastern Pennsylvania.
“We believe this to be another solid strategic transaction, which expands our service footprint into Burlington County, an area with compelling customer demographics and excellent growth potential,” First Bank CEO and President Patrick L. Ryan said. “In addition, this transaction will further strengthen our balance sheet by diversifying our loan portfolio and providing expanded access to cost-effective retail funding.
“Importantly, we believe the transaction will be immediately accretive to First Bank earnings per share, and we expect there to be minimal dilution to our tangible book value. Also, the Bank’s regulatory capital levels will remain very strong, enabling First Bank to continue to evaluate all appropriate growth opportunities.”
The merger gives Delanco customers “an excellent opportunity to offer our customers the advantages inherent with a larger bank, including enhanced product variety and financial strength, while at the same time maintaining a very customer-centric approach to business,” said Delanco CEO and President James Igo. “We also believe that our shareholders will benefit from ownership in a growing financial institution whose shares enjoy the added liquidity which comes from trading on a national exchange.”
Delanco Bancorp shareholders will receive 1.11 shares of First Bank common stock per each Delanco common share outstanding, in an all-stock exchange. First Bank expects to issue about 1 million new shares of common stock to consummate this transaction. The transaction is valued at $14.15 per share, or about $13.5 million in aggregate deal value.
