Increased my regional bank exposure. I think we will be seeing more of the likes of the merger deal below.
New Buy -VLY-Valley National Bancorp- Buy Order execution on Friday. A buy that I missed. The way I see it. The big yield currently is not very well covered by earnings.This bank makes sense in that the acquiring company can retain earnings. This by way of not having to pay out the majority of earnings through dividend payout. If the economy continues to improve, especially housing. I think this bank will enjoy higher rates of return through their ARM loan portfolio. Also while improving the clean up of past blunders in real estate lending. IMO this bank could also be a late beneficiary of hurricane Sandy. I think many effected East coast homeowners might only be coming in now for lending ( lag in insurance claims, just getting themselves back on their feet again, & destroyed personal records). This to fix or upgrade their homes from the storm.
Independent Bank Corp. and Mayflower Bancorp, Inc. Sign Definitive Merger Agreement for Acquisition
by Business Wirevia The Motley Fool May 14th 2013 4:42PM
Updated May 14th 2013 5:00PM
Independent Bank Corp. and Mayflower Bancorp, Inc. Sign Definitive Merger Agreement for Acquisition of Mayflower Bancorp, Inc.
ROCKLAND, Mass. & MIDDLEBORO, Mass.--(BUSINESS WIRE)-- Independent Bank Corp. (NAS: INDB) , parent of Rockland Trust Company, and Mayflower Bancorp, Inc. (NAS: MFLR) , parent of Mayflower Bank, have signed a definitive agreement for Independent to acquire Mayflower and Rockland Trust to acquire Mayflower Bank.
Mayflower Bank was founded in 1889 and currently has 8 Plymouth County bank branches, approximately $236 million in deposits, and approximately $141 million in loans.
"We are pleased to welcome Mayflower Bank customers and colleagues to Rockland Trust," said Christopher Oddleifson, the Chief Executive Officer of Independent. "Mayflower Bank is a profitable, well-managed institution with an excellent deposit base and strong credit quality. This acquisition will further strengthen Rockland Trust's position in the attractive Plymouth County area."
"This transaction is good for our customers and is in the best interests of our shareholders," said Edward M. Pratt, the Chief Executive Officer of Mayflower. "We are pleased to join Rockland Trust, a growing company with a terrific brand in our region. Our customers will benefit from the greater range of products and services that Rockland Trust offers and the convenience of Rockland Trust locations across Eastern Massachusetts."
The agreement provides that 70% of outstanding Mayflower shares will be exchanged for Independent shares at a fixed exchange ratio of .565 of an Independent share for each Mayflower share. Independent will purchase the remaining 30% of outstanding Mayflower shares for $17.50 per share in cash. Based upon Independent's $32.03 per share closing price on May 13, 2013 the transaction is valued at approximately $37.2 million. The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes and to provide a tax-free exchange for Mayflower shareholders who receive Independent shares. Mayflower shareholders will be able to elect between receiving cash or Independent shares, subject to proration and allocation so that 70% of outstanding Mayflower shares are exchanged for Independent stock and 30% exchanged for cash.
See map depicting the current bank branch locations of Rockland Trust and Mayflower Bank.
Independent anticipates that the Mayflower acquisition will be approximately 1.5% accretive to 2014 earnings, exclusive of one-time charges, primarily driven by consolidation efficiencies and approximately 2% accretive annually thereafter. Independent believes that the transaction will generate an internal rate of return of approximately 15%, and estimates tangible book dilution of approximately 2% that will be recaptured in about 3 months with a "crossover" of approximately 5 years.
The transaction has been approved by the boards of directors of each company and is subject to certain conditions, including the receipt of required regulatory approvals, approval by Mayflower shareholders, and other standard conditions. The parties anticipate that the closing of the transaction will likely occur in the fourth quarter of 2013.
Independent was advised by Keefe, Bruyette & Woods and used Choate Hall & Stewart LLP as its legal counsel. Mayflower was advised by Sterne, Agee & Leach, Inc. and used Kilpatrick Townsend & Stockton LLP as its legal counsel.
About Independent Bank Corp.
Independent Bank Corp., which has Rockland Trust Company as its wholly-owned commercial bank subsidiary, has $5.7 billion in assets. Rockland Trust offers a wide range of commercial banking products and services, retail banking products and services, business and consumer loans, insurance products and services, and investment management services. To find out why Rockland Trust is the bank "Where Each Relationship Matters®", visit www.RocklandTrust.com.
About Mayflower Bancorp., Inc.
Mayflower Bancorp, Inc. has $261 million in assets and is the holding company for Mayflower Bank, which was founded in 1889 as a Massachusetts chartered co-operative bank. Mayflower Bank is a full-service community bank that offers a variety of deposit products and makes mortgage loans for the construction, purchase, and refinancing of residential and commercial real estate as well as other commercial and consumer loans of various types. Mayflower Bank operates eight full-service offices in the Massachusetts communities of Bridgewater, Lakeville, Middleboro, Plymouth, Rochester, Wareham, and West Wareham.
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