On Friday, Bryn Mawr Bank Corp (BMTC), the holding company of Bryn Mawr Trust Co, announced the completion of the merger with Continental Bank Holdings, Inc. (CBH), the parent company of Continental Bank. With this move, Bryn Mawr Bank would be able to expand into Montgomery, Chester and western Philadelphia counties with the addition of 10 branches and about $433 million in loans and $480 million in deposits.
Merger Agreement
The stock-deal is valued at $125 million based on Bryn Mawr Bank's closing price of $31.30 on the NASDAQ stock market as on Dec 31, 2014. As per terms of the agreement scheduled to be completed in Sep 2015, each share of CBH common stock is being converted into the right to receive 0.45 shares of the Bryn Mawr Bank's common stock.
Further, holders of CBH's Series B Convertible Perpetual Preferred Stock warrants will get $2.94 cash for each outstanding Series B Warrant. Additionally, holders of CBH’s common stock options and other warrants will be exchanged for similar options or warrants of Bryn Mawr Bank’s common stock with effect to adjustment with the exchange ratio.
Notably, as a move to reward shareholders, CBH will pay a special dividend to its shareholders of $1.251 million, or 15 cents per common share, prior to closing of the merger.
An Attractive Deal
Following the closure of the deal, Bryn Mawr Bank will not only gain the experience of CBH, but also the growth opportunities in various competitive markets. Notably, this marks Bryn Mawr Bank's 7th acquisition since 2008, increasing its assets to a level of more than $2.8 billion.
Concurrently, joining hands with Bryn Mawr Bank will boost CBH’s abilities and enable it to provide its clients full advantages in the changing environment. Further, CBH’s clients will get the benefit of more resources, financial services and products.
Conclusion
Going forward, we believe that strategic acquisitions will help expand Bryn Mawr Bank’s business and improve its profitability. Strategic acquisitions have been part of Bryn Mawr Bank’s endeavor to strengthen its business model, expand capabilities and diversify footprint. The company has demonstrated its ability to assimilate local franchises, offering a wider range of products compared with the acquired company, thus increasing the number of options for its customers. This has been the driving force behind its growth in the recent years.
Bryn Mawr Bank currently carries a Zacks Rank #3 (Hold). Some Northeast stocks worth considering include Chicopee Bancorp, Inc. (CBNK), Webster Financial Corp. (WBS) and United Financial Bancorp, Inc. (UBNK). All three carry a Zacks Rank #2 (Buy).
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