Fulton Financial Corp. of Lancaster, Pa., has become the second institution in two months to pay a big price for a bank in the Middle Atlantic states.
The $3.1 billion-asset holding company will acquire Delaware National Bancshares, of Georgetown, Del., in a stock swap valued at $17.1 million, which is about 18% of Delaware National's assets.
The deal, pending shareholder and regulatory approval, will pay Delaware National shareholders 282% of book value, or 22 times earnings.
"These prices are drifting higher, just as we're all saying that they're going down," said Arnold G. Danielson, president of Danielson Associates in Rockville, Md.
Mr. Danielson attributed the high price, which translated to $25.22 for each share of Delaware National stock, to the strength of the local economy. The area is home to vibrant companies in tourism, agriculture and textiles, officials from both banks said.
Fulton Financial came late to the six-month bidding war over Delaware National. Officials wouldn't disclose who the other bidders were.
"We just entered talks there less than a month ago," said Rufus A. Fulton Jr., president and chief executive of Fulton Financial. "We were the Johnny-come-lately, but it didn't take long to see that that's what we wanted."
The previous high-priced deal occurred in December, when Financial Trust Corp. of Carlisle, Pa., paid 270% of book value to shareholders of Washington County National Bank in Williamsport, Md.
