Community Bank System entered into a definitive agreement to acquire Kinderhook Bank and its subsidiary National Union Bank of Kinderhook in an all cash transaction valued at approximately $93.4 million.
The transaction has been unanimously approved by the boards of directors of both companies.
The merger will provide natural market extension for both institutions, joining two franchises with long histories of customer service, as well as a commitment to their communities. The Kinderhook acquisition will give Community Bank an operating presence in the Capital District of upstate New York, with total assets of nearly $640 million, deposits of $560 million and 11 banking offices across a five-county area.
Under the terms of the agreement, shareholders of Kinderhook Bank Corp. will receive consideration per share of common stock equal to $62.00 in cash. This price represents, assuming full conversion of preferred equity, approximately 193% of Kinderhook Bank’s tangible book value as of September 30, 2018.
“Our acquisition of Kinderhook Bank will extend our banking footprint into markets which are similar to the other upstate markets in which we successfully compete,” said Mark E. Tryniski, Community Bank president and CEO. “Our move to establish a broader and deeper banking presence in this region reflects the relative economic, demographic and geographic attractiveness of the area. This investment also complements the financial commitment we made in 2018 when we added an experienced commercial banking team focused on the greater Albany area. We’re pleased with the results of this activity to date and confident that the Kinderhook franchise will further support our efforts to grow our retail and business banking presence in the Capital District.”
Upon completion of the transaction, the combined company will have approximately $11.3 billion in assets. Community Bank System expects the transaction to be approximately $0.07 to $0.08 per share accretive to its first full year of GAAP earnings and $0.09 to $0.10 per share accretive to cash earnings, excluding any one-time transaction costs.
The merger is expected to close in the second quarter of 2019, subject to customary closing conditions, Kinderhook shareholder approval and other required regulatory approvals.
Loomis & Co. acted as exclusive financial advisor to Community Bank System, and Cadwalader, Wickersham & Taft acted as its legal advisor. Endicott Financial Advisors and First Capital Equities acted as financial advisors to Kinderhook Bank, while Cranmore, FitzGerald, & Meaney acted as its legal advisor.
Headquartered in DeWitt, NY, Community Bank operates more than 230 customer facilities across upstate New York, Northeastern Pennsylvania, Vermont and Western Massachusetts and has assets of approximately $10.6 billion.
