Mid Penn Bancorp in Harrisburg, Pa., has agreed to buy 1st Colonial Bancorp in Mount Laurel, N.J.
The $6.4 billion-asset Mid Penn said in a press release that it will pay $101 million in cash and stock for the $877 million-asset 1st Colonial. The deal, which is expected to close in the first or second quarter, priced 1st Colonial at 116% of its tangible book value.
One 1st Colonial director to join Mid Penn’s board, while Robert White, 1st Colonial’s president and CEO, will become Mid Penn’s greater Philadelphia metro area market president and a senior risk adviser.
Mid Penn has three branches, a loan-production officer, $6.2 billion of deposits and $5.4 billion of loans.
The acquisition “brings together two institutions with a deep understanding of our customers’ needs, a shared commitment to our communities, and a focus on shareholder return,” Rory Ritrievi, Mid Penn’s chairman, president and CEO, said in the release.
“The combined bank will continue the positive impact Mid Penn has made in the greater Philadelphia metropolitan area market, creating a more powerful, resilient, and dynamic financial institution that is better positioned to invest in local businesses, support nonprofits, and help individuals and families achieve their financial goals,” Ritrievi added.
The deal is expected to be 14% accretive to Mid Penn’s 2027 earnings per share. It should take a little more than three years to earn back an estimated 6% dilution to Mid Penn’s tangible book value.
Mid Penn expects to cut about 40% of 1st Colonial’s annual noninterest expense. Mid Penn expects to incur about 12% of pretax merger-related expenses.
Seperately, Mid Penn said it will buy Cumberland Advisors, a Sarasota, Fla., investment management firm, for about $5.5 million in stock and cash transaction. Mid Penn will make up to $2.2 million in additional payments if certain milestones are met.
Keefe, Bruyette & Woods and Holland & Knight advised Mid Penn in the acquisition of 1st Colonial. Stephens and Stradley Ronon Steven & Young advised 1st Colonial.