PHILADELPHIA - CoreStates Financial Corp. agreed to acquire independence Bancorp, Perkasie, Pa., in a stock swap worth about $514 million, or 1.96 times book value.

Both companies' boards of directors approved the agreement last week.

Under terms of the agreement, each of Independence's 12.7 million shares will be exchanged for 1.5 shares of CoreStates, assuming that the average price of CoreStates' stock over a pricing period prior to closing is $27 per share or less.

As part of the deal, CoreStates also has an option to purchase up to 9.9 percent of Independence's stock.

The transaction is expected to close in the second quarter and will be accounted for as a pooling of interests.

Independence Bancorp is a $2.6 billion-asset bank holding company with four subsidiaries serving seven eastern Pennsylvania counties through 54 community banking offices.

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