Tower Bancorp and First Chester County Corporation have signed a definitive merger agreement pursuant to which Tower Bancorp will acquire First Chester in an all-stock transaction valued at approximately $65m.
The transaction further broadens the geographic markets of Tower Bancorp in the Pennsylvania counties of Chester and Delaware. This transaction will provide Tower Bancorp with the addition of $1.3bn in assets including, $958m in gross loans held for investment, $986m in deposits as well as 23 branches situated across four counties in southeastern Pennsylvania.
Tower Bancorp has said that it would achieve 15% cost savings, through the reduction of administrative and operational redundancies.
As part of the agreement, Tower Bancorp’s subsidiary bank, Graystone Tower Bank, has agreed to increase its lending facility with First Chester to up to $26m as well as to purchase up to $100m of residential mortgage and commercial loans from First National Bank of Chester County in order for the bank to satisfy the regulatory capital requirements of the Office of the Comptroller of the Currency.
Andrew Samuel, chairman and CEO of Tower Bancorp, said: “This acquisition is a continuation of our strategy to expand selectively our geographic footprint in contiguous markets with long-term growth potential. Upon closing we will be one of central and southeastern Pennsylvania’s largest independent community banks. Moreover, First Chester customers and the local community will benefit from the continued presence and engagement of a locally managed bank.”
John Featherman, current chairman, president and CEO of First Chester, said: “We believe this transaction will create significant value for First Chester shareholders, both immediately and longer term. In addition, both institutions share a similar culture and have a strong commitment to their respective communities.”
It is anticipated that the transaction will be completed during the second quarter of 2010, pending regulatory approvals, the approval of the shareholders of both Tower and First Chester, and the satisfaction of other closing conditions.
