A New Hampshire bank is taking another shot at selling itself, one year after its founding family scuttled a similar deal.
Finest Financial Corp., Pelham, N.H., has agreed to sell to Andover, Mass.-based First Essex Bancorp for $29.94 million in cash and stock. That's about 1.6 times Finest's June 30 book value.
The acquisition would add $179 million in assets, $158 million in loans, and three New Hampshire branches to $843 million-asset First Essex, which already operates 10 branches, including one in New Hampshire. It also brings in 20,000 new customers.
The deal thus fulfills First Essex's goal of expanding its presence in neighboring New Hampshire, increasing its total deposits in that state to $230 million. The purchase will double the thrift's deposit base in Rockingham County, just over the border, and bring it into Hillsborough County, home of the state's largest city, Manchester.
First Essex will increase its market share to 6th from 11th in Rockingham, and will be ranked eighth in Hillsborough.
"New Hampshire is a very attractive area," said president and chief executive Leonard A. Wilson. "It's not only an area for industrial and commercial growth, but it's also a residential area for Boston and suburban labor markets."
The agreement is Finest's second in a year that Finest has struck up a deal with a northeastern Massachusetts thrift. In 1995, the parent of Pelham Bank and Trust Co. agreed to sell to Andover Bancorp, a neighbor and rival of First Essex.
But the deal was squashed by a shareholder revolt led by the Fineman family, who founded Pelham in 1968. The family had objected to what they felt was an inadequate price and complained that there wasn't enough protection for the bank's employees. Some observers also speculated that the family simply wanted the bank to remain independent.
Andover had offered to pay about $25 million and had promised to hire all 55 employees and operate Pelham separately.
Mr. Wilson said there probably would be some layoffs at Pelham, but said he expects eventually to be able to offer jobs to most, if not all, employees. He noted that First Essex has already imposed an internal hiring freeze and said he expected that additional positions would become available through attrition.
Fineman family members could not be reached to discuss their views of this new deal, but Mr. Wilson said he understood that they supported the transaction.
"The Finemans are in full support of the transaction and we would not anticipate any problems ultimately in a shareholder vote," agreed Finest president and chief executive Brian W. Thompson. "This is an outstanding deal for our shareholders."
The transaction, which is still subject to shareholder and regulatory approval, is expected to close in December.