Tompkins Financial Corp. had mulled expansion in New York State, but instead it reached across the border into Pennsylvania.
The Ithaca, N.Y., company said Thursday it has agreed to buy VIST Financial Corp. of Wyomissing, Pa., in an all-stock deal valued at $86 million. The price tag is 1.18 times tangible book value before purchase accounting adjustments and includes a 1.5% deposit premium.
"The merger with VIST is very consistent with Tompkins' long-term growth strategy," Stephen S. Romaine, the chief executive of Tompkins, said in a news release. "It gives Tompkins the opportunity to expand into one of the most attractive markets in the mid-Atlantic region with established locations and experienced staff."
Romaine sought to assure that Tompkins — which has $3.4 billion of assets and serves the central, western and Hudson Valley regions of New York — is equipped to handle the new market. Its demographics are very similar to some if Tompkins' existing markets, he said. And VIST is no farther from Tompkins' headquarters than its Mahopac National Bank unit in the Hudson Valley, he said.
VIST has $1.4 billion of assets, $1.2 billion of deposits, $960 million of loans and 21 branches. It has banking, insurance and capital management arms. VIST would operate as a subsidiary of Tompkins with its own banking charter and board; Robert D. Davis would stay as president and CEO.
VIST shareholders would get "an attractive premium" relative to its recent market price, Davis said in the press release.
VIST shares were trading late morning at $11.20 apiece, up 62%. Tompkins shares had fallen nearly 1%, to $40.63.
Tompkins officials had considered buying some of the branches First Niagara Financial Corp. planned to divest as part of a larger deal with HSBC Bank USA. Frank Fetsko, Tompkins' chief financial officer, said late last summer that Tompkins had looked at branches in central New York and, to a lesser extent, branches in metropolitan Buffalo.
"We have said we're interested in exploring growth opportunities through acquisitions in markets that make sense for us," Fetsko said at the time. "Certainly some of these markets would be consistent with that."
(First Niagara has announced deals to sell 64 branches to KeyCorp of Cleveland; Community Bank System Inc. of Syracuse, N.Y.; and Financial Institutions Inc. of Warsaw, N.Y.)
Under the deal announced Thursday, Tompkins would pay about $12.50 of its stock for each VIST share. That would be an exchange ratio of 0.3127 based on a 20-day average closing price for Tompkins of $39.98 as of Tuesday.
The exchange ratio is subject to adjustments, the release said. If the average closing of Tompkins shares exceeds $43.98 for the 20-day period that ends three business days before VIST shareholders meet to vote on the deal, the exchange ratio would drop; if the average price falls below $35.98, the exchange ratio would rise.
The deal is expected to close early in the third quarter. Shareholder and regulatory approval are still required.
Macquarie Capital acted as financial advisor, and Harris Beach PLLC as legal adviser, to Tompkins. Stifel Nicolaus Weisel acted as financial advisor to VIST Financial Corp., and Stevens & Lee P.C. was its legal counsel.
Tompkins on Wednesday reported a 19% increase in net income ($9.4 million) in the fourth quarter from the third quarter, and 5.6% from a year earlier. Its loan-loss provision decreased.
Its loans grew by nearly 4% from a year earlier, to $2 billion at Dec. 31. But its net interest margin shrank 9 basis points from the third quarter and 13 basis points from a year earlier, to 3.62%.