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Mid Penn Bancorp (MPB) to Buy Riverview in $124.7M Stock Deal

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Mid Penn Bancorp, Inc. (MPB - Free Report) has entered an all-stock merger deal worth $124.7 million to acquire Riverview Financial Corporation. Closing of the transaction, subject to regulatory and shareholder approvals, is expected in the fourth quarter of 2021.

The merger will create one of the largest community banks in Pennsylvania with $4.8 billion of assets. Also, once the deal is complete, Mid Penn Bancorp will become the sixth-largest bank under $10 billion in Pennsylvania.

Mid Penn Bancorp’s president and CEO, Rory G. Ritrievi, stated, “We are pleased to welcome the Riverview shareholders, customers and employees to the Mid Penn family. These two great community bank organizations have been familiar with each other for years as competitors but now get to provide world class customer service to our markets throughout Pennsylvania together.”

Brett D. Fulk, the president and CEO of Riverview, said, “This is an exciting opportunity to join a like-minded, high-performing community bank with considerable franchise value and growth potential. Mid Penn has a high degree of familiarity with our operating markets and business lines. They share our relationship-centric culture, and together we will provide our clients with growth opportunities via higher lending limits and the ability to further invest in technology and digital initiatives.”

Terms of the Deal and Financial Impact

Per the deal, Riverview’s shareholders will get 0.4833 shares of Mid Penn Bancorp’s common stock for each of their own shares held. The option to purchase Riverview common stock will be cashed out upon the deal closure.

Notably, the merger agreement is intended for reorganization for federal income tax purposes and, hence, the shares that Riverview shareholders will receive are expected to be free of tax.

Mid Penn Bancorp expects the deal to accelerate profitability, and increase operating leverage and shareholder liquidity.

The merger is expected to result in per-year earnings per share accretion of more than 25%. Also, because of the proximity of both franchises, the merger will result in cost savings.

Mid Penn Bancorp expects the tangible book value dilution from the deal to be earned back in 2.25 years.

With the acquisition, Mid Penn Bancorp will receive entry into the growing Lehigh Valley and State College markets. Moreover, the company will get access to the attractive core deposit funding markets, including Clearfield and Altoona in western Pennsylvania.

So far this year, shares of Mid Penn Bancorp have gained 25.4% compared with 31.3% growth recorded by the industry.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Currently, the company carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Notably, given the rise in technology costs due to constant investments in the same amid the current economic scenario, mergers have been on the rise. Recently, Old National Bancorp (ONB - Free Report) and First Midwest Bancorp, Inc. (FMBI - Free Report) entered an all-stock merger of equals deal worth $6.5 billion, which is expected to close in late 2021 or early 2022.

Also, in an effort to become a premier agriculture lender in Wisconsin, Nicolet Bankshares, Inc. (NCBS - Free Report) entered a merger agreement to acquire County Bancorp and its wholly-owned subsidiary, Investors Community Bank.

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