First Bank in Hamilton, N.J., has agreed to buy Malvern Bancorp in Paoli, Pa.
The $2.6 billion-asset First Bank said in a press release that it will pay $149.5 million in cash and stock for the $1 billion-asset Malvern. The deal, which is expected to close in the second quarter, priced Malvern at 102.1% of its tangible book value.
Malvern has nine branches, $815.6 million of loans and $785.3 million of deposits.
“This strategic transaction expands our market position and deposit share in eastern Pennsylvania, while complementing our strong organic growth strategy,” Patrick Ryan, First Bank’s president and CEO, said in the release.
“This merger is another example of what we believe are high-quality and low-risk transactions we are using to build size and scale, solidify our market position and expand our service area,” Ryan added.
First Bank expects the transaction to be 12.7% accretive to its 2023 earnings per share and 20.5% accretive the following year. It will take a little over two years to earn back an estimated 9.2% dilution to tangible book value.
First Bank said it expects to incur $9.9 million of merger-related charges. The company plans to cut half of Malvern’s annual noninterest expenses.
Three Malvern directors will join First Bank’s board.
Hovde Group and Luse Gorman advised First Bank. Piper Sandler and Holland & Knight advised Malvern Bancorp.