Princeton Bancorp in New Jersey, which once tried to sell itself, is again a buyer.
The $2 billion-asset company said in a press release that it has agreed to buy the $321 million-asset Cornerstone Financial in Mount Laurel, N.J., for $17.9 million, subject to adjustment. The all-stock deal, which is expected to close in the second or third quarter, priced Cornerstone at 75% of its tangible book value.
Cornerstone has six branches $276 million in loans and $290 million of deposits, mostly in the Philadelphia suburbs.
The deal is expected to be 21% accretive to Princeton’s 2025 earning per share. It should take Princeton between two and three years to earn back an estimated 5.7% dilution to its tangible book value.
Princeton plans to cut half of Cornerstone’s annual noninterest expenses, or about $5.7 million. It expects to incur roughly $7.2 million of merger-related charges.
One Cornerstone director will join Princeton’s board.
“Cornerstone represents the second acquisition we have announced in the last 15 months, and further supports our growth in the southern New Jersey market, while doing so in a manner that is minimally dilutive to tangible book value and accretive to our earnings,” Edward Dietzler, Princeton’s president and CEO, said in the release.
The acquisition “provides a great opportunity to combine two community banks that share a deep commitment to their local markets, fills in our South Jersey branch presence and enhances our core banking franchise,” Dietzler added.
Raymond James and Stevens & Lee advised Princeton. Janney Montgomery Scott and Windels Marx Lane & Mittendorf advised Cornerstone.
Princeton tried to sell itself to Investors Bancorp but they called the deal off in 2017. The bank would then form a holding company and buy Noah Bank.