Crestar Financial Corp. said Tuesday that it has agreed to acquire TideMark Bancorp for cash and stock worth $38 million, twice tangible book value.
The holding company for TideMark Bank for Savings in Newport News, Va., which has $232 million of deposits and nine branches, TideMark was in the process of acquiring $70 million of deposits and eight branches from a local thrift. The purchase will actually bring the Richmond, Va.-based Crestar $300 million of deposits and 17 branches.
Crestar spokesman Eugene Putnam said the bank has not decided how many TideMark branches would be closed, but he predicted that the acquisition, with cost savings, would add a few cents to Crestar's per-share earnings next year.
There's certainly plenty of room for improvement at TideMark, which posted a 90% overhead ratio for the 12 months ending last June. TideMark reported a return on assets of 0.35% and a return on equity of 6.99% during the period.
Crestar has had a tendency lately to pay up for mediocre performers. Earlier this month, it agreed to pay 1.9 times book for a Warrenton-based thrift that suffered from both credit problems and capital deficiency. But analysts say Crestar has a good record of improving earnings at acquired S&Ls.
"They can pay decent premiums fight now and, given the experience they have make these deals nondilutive," said Scott & Stringfellow's Vernon Plack.
Crestar said it expects to complete the TideMark transaction during the first quarter of next year.