Butler, Pa.-based NexTier Inc., the holding company of NexTier Bank NA, will acquire in-state peer Mars Bancorp Inc., the holding company of Mars Bank, in a transaction expected to close in the first quarter of 2024.
Under the terms of the deal, shareholders of Mars will receive $20 in cash for each share of Mars common stock they own.
At announcement, S&P Global Market Intelligence calculates the deal value to be 128.41% of common equity and of tangible common equity, 6.97% of deposits, 6.14% of assets and 20.20x earnings. The tangible book premium-to-core deposits ratio is 1.74%.
S&P Global Market Intelligence valuations for bank and thrift targets in the mid-Atlantic region between Aug. 31, 2022, and Aug. 31, 2023, averaged 124.02% of book and 131.34% of tangible book and had a median of 13.35x last-12-months earnings, on an aggregate basis, and averaged 126.84% of book and 134.87% of tangible book and had a median of 12.78x last-12-months earnings, on a per-share basis.
The proposed transaction will result in a Western Pennsylvania community bank with total assets in excess of $2.6 billion, according to a news release.
Upon the deal's close, Mars Bank will be merged into NexTier Bank, with the combined company and branch locations operating under the NexTier Bank brand.
Based on S&P Global Market Intelligence data, NexTier will expand in Butler County, Pa., by four branches to be ranked second with a 18.1% share of approximately $6.15 billion in total market deposits and will expand in Allegheny County, Pa., by one branch to be ranked No. 15 with a 0.15% share of about $194.69 billion in total market deposits. In addition, NexTier will enter Mercer County, Pa., with one branch to be ranked ninth with a 0.12% share of roughly $4.23 billion in total market deposits.
NexTier President and CEO Clem Rosenberger will lead the combined institution; Mars President and CEO Jim Dionise will join the NexTier Bank board of directors upon consummation of the merger.
NexTier Bank, with 27 branches and $2.13 billion in assets as of June 30, focuses on commercial business, treasury management and relationship building. Mars Bank, with $520.8 million in assets as of June 30, has capabilities in retail, mortgage and commercial lending, as well as digital acquisition.
Janney Montgomery Scott LLC served as financial adviser and Alston & Bird LLP acted as legal counsel to NexTier. D.A. Davidson & Co. was financial adviser to Mars, while Silver Freedman Taff & Tiernan LLP acted as legal counsel.
