Norwood Financial in Honesdale, Pa., has agreed to buy Delaware Bancshares in Walton, N.Y.
The $751 million-asset Norwood said in a press release Thursday that it will pay $15.4 million in cash and stock for the $372 million-asset parent of NBDC Bank. The deal, which is expected to close in the third quarter, values Delaware Bancshares at 116.3% of its tangible book value.
"The combination of talent and prime locations will enable us to better serve our existing customers in Sullivan and Delaware counties and offer expanded products and services to the NBDC Bank customer base," Lewis Critelli, Norwood's president and chief executive, said in the release.
Norwood said it expects the transaction to be accretive to its earnings in the first full year of operations, though it will likely take three years to earn back any dilution to Norwood’s tangible book value. The company plans to retire about $20 million in senior debt and trust-preferred securities held by Delaware Bancshares, which should save more than $1.3 million in annual pretax borrowing costs.
Boenning & Scattergood and Jones Walker advised Norwood. Sandler O'Neill and Cranmore, FitzGerald & Meaney advised Delaware Bancshares.
