Mid Penn Bancorp in Millersburg, Pa., has agreed to buy Riverview Financial in Harrisburg, Pa.
The $3 billion-asset Mid Penn said in a press release Wednesday that it will pay $124.7 million in stock for the $1.4 billion-asset Riverview. The deal, which is expected to close in the fourth quarter, priced Riverview at 128% of its tangible book value.
The acquisition will provide Mid Penn with its first branches in Pennsylvania’s Lehigh Valley and State College markets.
“These two great community bank organizations have been familiar with each other for years as competitors but now get to provide world class customer service to our markets throughout Pennsylvania together,” Rory Ritrievi, Mid Penn’s president and CEO, said in the release.
“This combination provides strong economic value to both shareholder groups and creates a financial institution with plenty of muscle at a time when it is most important,” Ritrievi added. “That muscle should allow us to continue to provide best in class return to both groups of shareholders.”
Two Riverview directors will join Mid Penn’s board.
Mid Penn said the deal should create 25% earnings per share accretion annually. The company should earn back any dilution to its tangible book value in just over two years.
Mid Penn said it expects to cut about half of Riverview’s annual noninterest expenses. The company plans to incur about $16 million of merger-related expenses.
Piper Sandler and Pillar+Aught advised Mid Penn. Janney Montgomery Scott and Luse Gorman advised Riverview.