Arrow Financial in Glens Falls, N.Y., has agreed to buy Adirondack Bancorp in Utica, N.Y.
The $4.5 billion-asset Arrow said in a press release that it will pay $89.1 million in cash and stock for the $942 million-asset Adirondack. The deal, which is expected to close in the second quarter, priced Adirondack at 138.2% of its tangible book value.
The companies “are two deeply rooted and culturally aligned community banks that share a long-standing commitment to building strong relationships, understanding the important role we play in local economic growth and community support,” David DeMarco, Arrow’s president and CEO, said in the release. “Bringing together these … institutions allows us to complement Adirondack’s current product offerings with our wealth management and insurance services and deliver meaningful value for our shareholders.”
Rocco Arcuri Sr., Adirondack’s president and CEO, will join Arrow as a regional president and a director.
The transaction is expected to be 18% accretive to Arrow’s 2027 earnings per share. It should take about three years for Arrow to earn back an estimated 9.1% dilution to its tangible book value.
Arrow expects to incur $29.8 million in pretax merger-related charges. It plans to cut about 45% of Adirondack’s annual noninterest expenses.
Hovde Group and Spierer, Woodward, Corbalis & Goldberg advised Arrow. Keefe, Bruyette & Woods and Luse Gorman advised Adirondack.