LANCASTER, PA-Locally based Fulton Financial Corp. continues its bank buying spree with an agreement to pay approximately $89 million for Somerville, NJ-based SVB Financial Services Inc. This agreement follows by a week completion of FFC's purchase of Windsor, NJ-based First Washington Financial Corp. for $148 million. For a further information, go to Fulton Completes $148M Purchase of First Washington.
The SVB acquisition adds 11 Somerset Valley Bank branches in three New Jersey counties to the newly obtained 16 New Jersey-located First Washington State Bank offices. It takes FFC's overall presence in that state alone to 64 banking locations in 14 of the state's 21 counties. FFC chairman and CEO Rufus A. Fulton Jr. says in a statement, "This acquisition enables us to solidify our presence in New Jersey markets while enhancing our existing New Jersey customers."
As with the First Washington purchase, Somerset will retain its name and operate as a separate subsidiary of Fulton. SVB's current chairman, John K. Kitchen, and president and CEO, Robert P. Corcoran, will retain their posts with the subsidiary and a director of SVB will join FFC's board.
Under the merger agreement, FFC acquires all SVB shares of common stock, and each share outstanding on completion of the transaction will be exchanged for a combination of FFC stock and cash. Specifically, each SVB shareholder can elect to receive a 100% exchange for in Fulton stock, 100% in cash or a combination of stock and cash. Their choice is subject to achieving an overall minimum of 20% and maximum of 40% of SVB shares in exchange for cash.
SVB shares that convert to shares of FFC will be based on a fixed exchange ratio of just over .95 shares of FFC stock for each SVB share. Shares of SVB stock will convert to cash at a per-share amount based on $21 per SVB share. The price represents a multiple of just over 3.1 times SVB's common shareholders' equity as of Sept. 30.
The merger is subject to approval by the Federal Reserve, New Jersey Department of Banking and Insurance, and SVB shareholders and is expected to close in third-quarter 2005. SVB has approximately $475 million in assets. Fulton's current assets are $11.1 billion. Currently, Fulton operates 224 banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through 13 affiliates, all acquired through mergers and all operating as separate subsidiaries.
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