Griffin Advises Beneficial Bancorp, Inc. in its Acquisition of Conestoga Bank
Beneficial Bancorp, Inc. (NASDAQ: BNCL), headquartered in Philadelphia, Pennsylvania, is a diversified financial services company with $4.7 billion in assets, operating in Philadelphia and the surrounding area. In January of 2015, Beneficial completed a conversion from a mutual holding company ownership structure to a fully publicly owned stock company in which it raised approximately $500 million in capital.
On October 22, 2015, Beneficial announced that it would acquire Conestoga Bank ($712 million in assets) for 160% of its tangible book value at closing in an all-cash deal that will have a maximum transaction value of $105 million. The transaction closed on April 18, 2016.
Beneficial’s acquisition of Conestoga Bank increases Beneficial’s market density in areas that it currently serves, which has been a primary strategic objective for the Company. The transaction also expands Beneficial’s product offerings through the addition of Conestoga’s SBA lending team and a small ticket leasing line of business. From a financial perspective, the transaction serves to effectively deploy a portion of the capital raised in the conversion.
The acquisition is expected to be approximately 5% dilutive to tangible book value, but 45% accretive to earnings. The strong earnings accretion serves to earn back the TBV dilution in approximately 4.5 years and results in an internal rate of return of 15%.
The acquisition will increase Beneficial’s Philadelphia deposit base by approximately $530 million or 16%, and will improve Beneficial’s market share in Chester and Bucks County.
Griffin Financial Group LLC served as exclusive financial adviser to Beneficial Bancorp, Inc.