Hamilton, N.J.-based First Bank agreed to acquire Paoli, Pa.-based Malvern Bancorp Inc. and its subsidiary, Malvern Bank NA, in a transaction valued at approximately $149.5 million.
At announcement, S&P Global Market Intelligence calculates the deal value to be 102.37% of common equity and tangible common equity, 19.09% of deposits, 14.36% of assets and 21.35x earnings. The tangible book premium-to-core deposits ratio is 0.44%.
Market Intelligence valuations for bank and thrift targets in the Mid-Atlantic region between Dec. 14, 2021, and Dec. 14, 2022, averaged 121.44% of book and 129.25% of tangible book and had a median of 17.77x last-12-months earnings, on an aggregate basis, and averaged 123.58% of book and 133.52% of tangible book and had a median of 16.34x LTM earnings, on a per-share basis.
The boards of directors of both companies approved the deal.
Malvern Bank had total assets of approximately $1.04 billion, deposits worth approximately $785.3 million and loans of approximately $815.6 million as of Sept. 30.
Following the completion of the transaction, First Bank will have approximately $3.68 billion in total assets with 27 branches located in seven New Jersey counties, three eastern Pennsylvania counties and one Florida county.
Based on Market Intelligence data, with the completion of the deal, First Bank will expand in Chester County, Pa., by six branches to be ranked No. 11 with a 3.22% share of approximately $18.65 billion in total market deposits. It will enter Delaware County, Pa., with two branches to be ranked No. 15 with a 0.78% share of approximately $17.24 billion in total market deposits. It will also enter Palm Beach County, Fla., with one branch to be ranked No. 42 with a 0.01% share of approximately $75.08 billion in total market deposits. It will expand in Morris County, N.J., by one branch to be ranked No. 17 with a 1.15% share of approximately $75.08 billion in total market deposits.
"We expect the transaction will be significantly and immediately accretive to First Bank earnings per share and that the earn back on tangible book dilution to be under two and a half years. First Bank's regulatory capital levels will remain strong, enabling us to continue to evaluate all appropriate growth opportunities," Patrick Ryan, president and CEO of First Bank, said in the release.
Malvern shareholders will receive 0.7733 share of First Bank common stock and $7.80 in cash for each of Malvern's outstanding common shares, according to the deal terms. First Bank expects to issue approximately 5.9 million new shares of First Bank common stock and $59.4 million in cash consideration to consummate this transaction.
The deal is expected to close in the second quarter of 2023, subject to shareholder and regulatory approvals.
Hovde Group LLC acted as financial adviser to First Bank, and Piper Sandler & Co. acted as financial adviser to Malvern Bancorp. Luse Gorman PC provided legal counsel to First Bank, and Holland & Knight LLP provided legal counsel to Malvern Bancorp.
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