Beneficial Bancorp, the holding company for Beneficial Bank, has agreed to acquire an ownership interest in Conestoga Bank from the latter’s holding company Conestoga Bancorp.
Conestoga Bank operates with locations in Philadelphia, Delaware, Montgomery, Bucks, Chester and Lehigh Counties.
As of 30 June 2015, the lender managed about $712m in assets, $506m in loans and $530m in deposits.
Under the terms of the deal, Conestoga Bank will subsequently be merged into Beneficial Bank, with Conestoga Bancorp receiving cash for all of the outstanding shares of Conestoga Bank.
The transaction is valued at 160% of Conestoga Bank’s tangible book value at closing and will not exceed $105m. Any tangible book value more than $65.6m will be distributed to Conestoga Bancorp following the completion of the acquisition.
Beneficial president and CEO Gerard Cuddy said: "We are pleased to announce our agreement to acquire Conestoga Bank which strengthens our position in the Philadelphia marketplace and provides an opportunity to meaningfully improve our earnings profile as we begin to deploy our capital from the second step conversion.
"Conestoga Bank’s fourteen locations are a great complement to our branch network and add important commercial and consumer relationships to our banking franchise. Combining our two well-established and well-respected companies will create an enhanced community banking franchise that is better positioned to serve our customers, our employees and our communities."
The deal, scheduled to close during the first or second quarter of 2016, has already secured the nod from the boards of directors of both companies.