Bryn Mawr Bank Corporation (Nasdaq:BMTC) (the "Corporation"),
parent of The Bryn Mawr Trust Company (the "Bank”), today announced
that the Corporation has entered into a definitive Agreement and
Plan of Merger (the "Merger Agreement") to acquire Royal Bancshares
of Pennsylvania, Inc. (Nasdaq:RBPAA) (“Royal”), parent company of
Royal Bank America (“Royal Bank”), in a transaction with an
aggregate value of $127.7 million (the “Merger” or the
“Acquisition”).
The Acquisition, which is expected to add
approximately $602 million in loans and $630 million in deposits
(based on unaudited December 31, 2016 financial information),
strengthens the Corporation’s position as the largest community
bank in Philadelphia’s western suburbs and, based on deposits,
ranks it as the eighth largest community bank headquartered in
Pennsylvania. The Acquisition will expand the Corporation's
distribution network by providing entry into the new markets of New
Jersey and Berks County, Pennsylvania.
Frank Leto, President and CEO of the Corporation
commented, “The acquisition of Royal Bank is a logical choice for
Bryn Mawr Trust. With its strong lending team and prime branch
locations, Royal Bank provides BMT with its first location in
Center City Philadelphia, as well as a foothold in the State of New
Jersey, where Royal has established a well-received presence in the
Princeton market.” Mr. Leto continued, “We are excited to be able
to expand our banking presence in this thriving market, and plan to
introduce our comprehensive suite of financial services which also
includes wealth management and insurance. We believe these new
markets will provide a tremendous growth opportunity for our merged
institutions. In addition, we are pleased to announce that Kevin
Tylus, Royal Bank’s President and CEO, will join our Senior
Management team in order to continue to expand these relationships
and to help ensure a smooth integration of the two
institutions.
Mr. Leto added, “BMT continues to attract customers
who are frustrated with some of our larger competitors, often due
to their lack of personal service, slow response time, or their
inability to satisfy a more customized borrowing need. We believe
that there is a real opportunity for institutions like Bryn Mawr
Trust to occupy a much larger space in the banking, wealth
management and insurance areas. As I’ve stated many times before,
Bryn Mawr Trust is committed to the communities we serve and I
firmly believe that, with the breadth of our product offerings, we
are well positioned to take advantage of every opportunity that
presents itself. By joining forces with Royal Bank, we take a big
step toward accomplishing this goal.”
Royal Bank Chairman, Robert Tabas, stated, “The
combination is a great opportunity for our shareholders and
stakeholders to join with a high-performing, diversified
organization like Bryn Mawr Trust.”
Kevin Tylus, Royal Bank’s President and CEO, also
commented, "We are pleased to partner with Bryn Mawr Trust, an
organization that shares similar values of customer and community
service and the same strong desire to support growth and
development in our region.”
Under the terms of the Merger Agreement, Class A
shareholders of Royal will receive 0.1025 shares of the
Corporation’s common stock for each share of Royal’s Class A common
stock and Class B shareholders of Royal will receive 0.1179 shares
of the Corporation’s common stock for each share of Royal Class B
common stock. In addition, under the terms of the Merger
Agreement, all options to purchase shares of Royal Class A common
stock will be cashed out upon the close of the Merger.
The Acquisition is expected to be accretive to
tangible book value per share as of the acquisition date and
accretive to earnings during the first twelve months of operations,
excluding the effects of non-recurring merger-related expenses.
The transaction multiples indicate merger
consideration valued at 247.3% of Royal’s tangible book value,
165.9% of Royal’s adjusted tangible book value (increased by
recognition of a $25.3 million deferred tax asset), and 25.0 times
adjusted 2016 net income.
The transaction is subject to customary closing
conditions including the receipt of regulatory approvals and Royal
shareholder approval and is expected to close in the third quarter
of 2017.
Boenning & Scattergood, Inc. served as
financial advisor to Bryn Mawr Bank Corporation and Reed Smith LLP
served as legal counsel to Bryn Mawr Bank Corporation. Both Sandler
O'Neill & Partners, L.P., and RBC Capital Markets, LLC served
as financial advisors to Royal Bancshares of Pennsylvania, Inc.,
and Stevens & Lee, P.C. served as legal counsel to Royal
Bancshares of Pennsylvania, Inc.
About Bryn Mawr Bank Corporation
Bryn Mawr Bank Corporation, including its
wholly-owned subsidiary, The Bryn Mawr Trust Company, headquartered
in Bryn Mawr Pennsylvania was founded in 1889, has $3.42 billion in
corporate assets and $11.33 billion in wealth assets under
management, administration, supervision, and brokerage. Bryn
Mawr Trust operates 25 full service retail bank locations, eight
limited-access retirement community locations in Montgomery,
Chester, Delaware and Philadelphia Counties in Pennsylvania and New
Castle County, Delaware, and one limited-service branch banking
location in Hershey, Dauphin County, Pennsylvania. The Bank also
serves clients through its Wealth, Private Banking, and Insurance
divisions in addition to Leasing, Mortgage, and Commercial Lending
divisions. Further information about products and services offered
may be obtained at www.bmtc.com.
About Royal Bancshares, Inc.
Royal Bancshares of Pennsylvania, Inc.,
headquartered in Bala Cynwyd, Pennsylvania, is the parent company
of Royal Bank, which is headquartered in Narberth, Pennsylvania.
Royal Bank serves growing small and middle market businesses,
commercial real estate investors, consumers, and depositors
principally in Montgomery, Delaware, Chester, Bucks, Philadelphia
and Berks counties in Pennsylvania, central and southern New
Jersey, and Delaware. Established in 1963, Royal Bank provides an
array of financial products and services through a comprehensive
suite of cash management services and thirteen branches and two
loan production offices. More information on Royal Bancshares of
Pennsylvania, Inc., Royal Bank, and its subsidiaries can be found
at www.royalbankamerica.com.
CONFERENCE CALL:
The Corporation will hold a conference call at
11:00 a.m. Eastern Time on Tuesday, January 31, 2017.
Interested parties may participate by dialing (toll-free)
1-877-504-8812 (international (toll) 1-412-902-6656). A
recorded replay of the conference call will be available one hour
after the conclusion of the call and will remain available through
February 14, 2017. The recorded replay may be accessed by
dialing (toll-free) 1-877-344-7529 (international (toll)
1-412-317-0088). The conference number is 10100880.
The conference call will be simultaneously
broadcast live over the Internet through a webcast on the investor
relations portion of the Bryn Mawr Bank Corporation website. To
access the call, please visit the website at
http://services.choruscall.com/links/bmtc170131.html. An online
archive of the webcast will be available within one hour of the
conclusion of the call. The Corporation has also recently expanded
its Investor Relations website to include added resources and
information for shareholders and interested investors.
Interested parties are encouraged to utilize the expanded resources
of the site for more information on Bryn Mawr Bank Corporation.
FORWARD LOOKING STATEMENTS AND SAFE
HARBORThis press release contains statements which, to the
extent that they are not recitations of historical fact may
constitute forward-looking statements for purposes of the
Securities Act of 1933, as amended, and the Securities Exchange Act
of 1934, as amended. Such forward-looking statements may include
financial and other projections, as well as statements regarding
the expected financial and other effects of the transaction, the
Corporation’s future plans, objectives, performance, revenues,
growth, profits, operating expenses or the Corporation’s underlying
assumptions. The words “may,” “would,” “should,” “could,” “will,”
“likely,” “possibly,” “expect,” “anticipate,” “intend,” “indicate,”
“estimate,” “target,” “potentially,” “promising,” “probably,”
“outlook,” “predict,” “contemplate,” “continue,” “plan,”
“forecast,” “project,” “are optimistic,” “are looking,” “are
looking forward” and “believe” or other similar words and phrases
may identify forward-looking statements. Persons reading this press
release are cautioned that such statements are only predictions,
and that the Corporation’s actual future results or performance may
be materially different.
Such forward-looking statements involve known and
unknown risks and uncertainties. A number of factors could
cause actual results, events or developments, or industry results,
to be materially different from any future results, events or
developments expressed, implied or anticipated by such
forward-looking statements, and so business and financial condition
and results of operations could be materially and adversely
affected. In addition to factors previously disclosed in the
Corporation’s and Royal’s reports filed with the U.S. Securities
and Exchange Commission (the “SEC”) and those identified elsewhere
in this document, such factors include, among others, that required
regulatory, shareholder or other approvals are not obtained or
other closing conditions are not satisfied in a timely manner or at
all; that prior to the completion of the transaction or thereafter,
the Corporation’s and Royal’s respective businesses may not perform
as expected due to transaction-related uncertainty or other
factors; that the parties are unable to successfully implement
integration strategies; reputational risks and the reaction of the
companies’ customers to the transaction; diversion of management
time on merger-related issues; the integration of acquired business
with the Corporation may take longer than anticipated or be more
costly to complete and that the anticipated benefits, including any
anticipated cost savings or strategic gains may be significantly
harder to achieve or take longer than anticipated or may not be
achieved; the need for capital, ability to control operating costs
and expenses, and to manage loan and lease delinquency rates; the
credit risks of lending activities and overall quality of the
composition of loan, lease and securities portfolio; the impact of
economic conditions, consumer and business spending habits, and
real estate market conditions; changes in the levels of general
interest rates, deposit interest rates, or net interest margin and
funding sources; changes in banking regulations and policies;
changes in accounting policies and practices; the inability of key
third-party providers to perform their obligations to us; our
ability to attract and retain key personnel; competition in our
marketplace; war or terrorist activities. All forward-looking
statements and information set forth herein are based on
management’s current beliefs and assumptions as of the date hereof
and speak only as of the date they are made. The Corporation
and Royal do not undertake to update forward-looking
statements.
For a complete discussion of the assumptions, risks
and uncertainties related to our business, you are encouraged to
review our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K, as updated by
our quarterly or other reports subsequently filed with the SEC.
Additional Information About the Merger and
Where to Find It
In connection with the proposed merger transaction,
the Corporation will file with the Securities and Exchange
Commission a Registration Statement on Form S-4 that will include a
Proxy Statement of Royal, and a Prospectus of the Corporation, as
well as other relevant documents concerning the proposed
transaction. Shareholders are urged to read the Registration
Statement and the Proxy Statement/Prospectus regarding the Merger
when it becomes available and any other relevant documents filed
with the SEC, as well as any amendments or supplements to those
documents, because they will contain important information.
A free copy of the Proxy Statement/Prospectus, as
well as other filings containing information about the Corporation
and Royal, may be obtained at the SEC’s Internet site
(http://www.sec.gov).
The Corporation and Royal and certain of their
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the shareholders of Royal in
connection with the proposed merger. Information about the
directors and executive officers of the Corporation is set forth in
the proxy statement for the Corporation’s 2016 annual meeting of
shareholders, as filed with the SEC on a Schedule 14A on March 18,
2016. Information about the directors and executive officers of
Royal is set forth in the proxy statement for Royal’s 2016 annual
meeting of shareholders, as filed with the SEC on a Schedule 14A on
March 17, 2016. Additional information regarding the interests of
those participants and other persons who may be deemed participants
in the transaction may be obtained by reading the Proxy
Statement/Prospectus regarding the proposed merger when it becomes
available. Free copies of this document may be obtained as
described in the preceding paragraph.
FOR MORE INFORMATION CONTACT:
For BMBC:
Frank Leto, President, CEO
610-581-4730
Mike Harrington, CFO
610-526-2466
For Royal Bancshares of Pennsylvania, Inc.:
Kevin Tylus, President, CEO
610-677-2222
Michael Thompson, CFO
610-677-2216
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