First Bank, based in Hamilton, N.J., says it has agreed to pay $27.2 million in stock to acquire Bucks County Bank, Doylestown.
The deal "fits nicely" with First Bank's expansion plans: it will add Bucks branches in Bensalem, Levittown and Warminster to First Bank's 10 branches in the Trenton area, Trevose, Willliamstown N.J., and north-central New Jersey, said Joe Gladue, director of research at Merion Capital Management, in a report to clients.
At $11.07 per Bucks County Bank share, the deal is about a 36 percent premium to Bucks County's last share sale price, though the stock "trades infrequently," Gladue noted. First Bank plans to make the deal profitable by cutting expenses 40 percent, Gladue added. Bucks County Bank employed around 38 people at Dec. 31, according to Federal Deposit Insurance Corp. data.
First Bank, which is traded on the Nasdaq stock market (FRBA), has $1 billion in loans and investment assets. THe company earned $6.4 million in after-tax profits in 2016.
Bucks County Bank, which has traded over-the-counter, has $198 million in loans and other assets, and earned around $600,000 in both 2016 and 2015, according to Federal Deposit INsurance Corp. data. It has branches in Bensalem, Levittown, and Warminster.
The sale price is about equal to Bucks County Bank's capital as reported to the FDIC on Dec. 31, which is about double the bank's capital when it opened in 2004.