Customers Bancorp (CUUU) to Acquire CMS Bancorp (CMSB) in $20.8M Deal
Tweet Send to a Friend
Customers Bancorp Inc. (OTCQB: CUUU), and CMS Bancorp, Inc. (Nasdaq: CMSB), jointly announced their execution of a definitive Agreement and Plan of Merger.
Under the Agreement, Customers Bancorp will acquire via merger CMS Bancorp and ultimately CMS Bank. CMS Bank is a community and customer-oriented bank, offering services to consumers and small businesses in Westchester County, New York, and the surrounding areas.
Upon closing of the transactions, Customers Bancorp will have retail banking offices located in the communities of Eastchester, Greenburgh, Mount Vernon, West Harrison, and Mount Kisco, in Westchester County, New York, as well as approximately $185 million in loans and $208 million in deposits. The CMS Bancorp acquisition is expected to be mildly accretive to Customers Bancorp's capital, earnings and book value per share within the first six months after closing. The total transaction value is approximately $20.8 million, and the Agreement provides for CMS Bancorp stockholders to receive shares of Customers Bancorp voting common stock based upon an exchange ratio determined at the closing of the transaction, with fractional shares to be cashed out.
CMS Bancorp stock will be valued at 95% of CMS Bancorp's common stockholders' equity as of the month end prior to the closing, while Customers Bancorp stock will be valued at 125% of Customer Bancorp's modified stockholder equity as of the month end prior to closing. Modified stockholders' equity is defined as June 30, 2012 book value plus additions to retained earnings through the month-end prior to closing. Shares issued by Customers Bancorp in capital raises and purchase accounting adjustments from any other acquisitions will not be included in calculating modified stockholders' equity.
Based on the March 31, 2012 book value per share of CMS Bancorp and the June 30, 2012 modified stockholders' equity of Customers Bancorp of $11.75 and $13.99, respectively, the exchange ratio would be 0.6383. The actual exchange ratio will likely be different at closing.
Closing of the CMS Bancorp merger, which is subject to regulatory approval, customary closing conditions and the approval of CMS Bancorp's stockholders, is expected to occur in the first half of 2013. In mid-June 2012, Customers Bancorp announced an accretive to capital, book value and earnings transaction to acquire Acacia Savings Bank from Ameritas Mutual Companies for $65 million in Customers Bancorp common and preferred stock. That transaction will add the one branch of Acacia to the Customers Bank franchise and also comes with a regional mortgage banking operation. "We intend to complete our approval process for Acacia, close it and then close the CMS transaction," stated Sidhu. "After closing the CMS transaction, we hope to gradually continue expanding in the New York market, however, principally through organic growth," Sidhu concluded.
For these transactions, Customers Bancorp retained Stradley Ronon Stevens & Young, LLP as legal advisor. CMS Bancorp was advised by Sandler O'Neill + Partners, L.P. as financial advisor and Paul Hastings LLP as legal advisor.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
Under the Agreement, Customers Bancorp will acquire via merger CMS Bancorp and ultimately CMS Bank. CMS Bank is a community and customer-oriented bank, offering services to consumers and small businesses in Westchester County, New York, and the surrounding areas.
Upon closing of the transactions, Customers Bancorp will have retail banking offices located in the communities of Eastchester, Greenburgh, Mount Vernon, West Harrison, and Mount Kisco, in Westchester County, New York, as well as approximately $185 million in loans and $208 million in deposits. The CMS Bancorp acquisition is expected to be mildly accretive to Customers Bancorp's capital, earnings and book value per share within the first six months after closing. The total transaction value is approximately $20.8 million, and the Agreement provides for CMS Bancorp stockholders to receive shares of Customers Bancorp voting common stock based upon an exchange ratio determined at the closing of the transaction, with fractional shares to be cashed out.
CMS Bancorp stock will be valued at 95% of CMS Bancorp's common stockholders' equity as of the month end prior to the closing, while Customers Bancorp stock will be valued at 125% of Customer Bancorp's modified stockholder equity as of the month end prior to closing. Modified stockholders' equity is defined as June 30, 2012 book value plus additions to retained earnings through the month-end prior to closing. Shares issued by Customers Bancorp in capital raises and purchase accounting adjustments from any other acquisitions will not be included in calculating modified stockholders' equity.
Based on the March 31, 2012 book value per share of CMS Bancorp and the June 30, 2012 modified stockholders' equity of Customers Bancorp of $11.75 and $13.99, respectively, the exchange ratio would be 0.6383. The actual exchange ratio will likely be different at closing.
Closing of the CMS Bancorp merger, which is subject to regulatory approval, customary closing conditions and the approval of CMS Bancorp's stockholders, is expected to occur in the first half of 2013. In mid-June 2012, Customers Bancorp announced an accretive to capital, book value and earnings transaction to acquire Acacia Savings Bank from Ameritas Mutual Companies for $65 million in Customers Bancorp common and preferred stock. That transaction will add the one branch of Acacia to the Customers Bank franchise and also comes with a regional mortgage banking operation. "We intend to complete our approval process for Acacia, close it and then close the CMS transaction," stated Sidhu. "After closing the CMS transaction, we hope to gradually continue expanding in the New York market, however, principally through organic growth," Sidhu concluded.
For these transactions, Customers Bancorp retained Stradley Ronon Stevens & Young, LLP as legal advisor. CMS Bancorp was advised by Sandler O'Neill + Partners, L.P. as financial advisor and Paul Hastings LLP as legal advisor.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- Yahoo! (YHOO) Board Said to Approve $1.1B Tumblr Deal
- UPDATE: Aruba Networks, Inc. (ARUN) Misses Q3 EPS by 4c, Guidance Light
- Macy's (M) Posts Q1 EPS of 55c; Comps Up 3.8%; Boosts Dividend 25%, Raises Buyback
Create E-mail Alert Related Categories
Mergers and Acquisitions, Trading HaltsRelated Entities
Sandler O'Neill, Earnings
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
