HARRISBURG — Mid Penn Bancorp Inc. and Brunswick Bancorp have signed a definitive agreement for Mid Penn to acquire the New Brunswick, N.J., headquartered Brunswick.
The combination cash and stock transaction is valued at approximately $53.9 million — based on Mid Penn’s closing stock price of $30.95 for the trading day ending Dec. 19.
Once complete, the transaction will create a combined community banking franchise with approximately $5 billion in assets, $4.2 billion in deposits and $3.8 billion in gross loans, according to a press release.
The boards of directors for Mid Penn and Brunswick have unanimously approved the merger, which is expected to close in the second quarter of 2023. The transaction must first receive customary closing conditions that include regulatory approvals and approvals from Mid Penn and Brunswick shareholders.
The merger will expand Mid Penn’s footprint into the central New Jersey market, the company said. And when it is completed, Mid Penn will add five total financial centers — four in Middlesex County and one in Monmouth County.
Rory G. Ritrievi, Mid Penn chairman, president and CEO, said Brunswick has built a “solid reputation as a dependable bank for the numerous businesses and consumers in the communities they serve,” under the leadership of Frank Gumina, executive chairman and Nicholas A. Frungillo Jr., Brunswick’s CEO and president.
“We look forward to providing the strength of our balance sheet and our own relationship-building expertise in enhancing and expanding upon their success. We feel confident that this combination will, in a very short period of time, create one of the most dynamic and organically growth-oriented financial institutions in that region,” Ritrievi said in a statement.
Under the terms of the merger agreement, 50% of Brunswick common shares will be converted into Mid Penn common stock while the remaining 50% will be exchanged for cash. Brunswick shareholders will have the option to elect to receive either 0.598 shares of Mid Penn common stock or $18.00 in cash for each common share of Brunswick they own, according to the release.
The purchase price is subject to adjustment if Brunswick does not meet certain “minimum shareholder equity covenants.” All options to purchase Brunswick common stock will be cashed out upon completion of the merger. The release stated that the transaction is intended to qualify as a reorganization for federal income tax purposes. As a result, the receipt of Mid Penn common stock by shareholders of Brunswick is expected to be tax-free.
“Mid Penn is an excellent cultural fit for Brunswick and the opportunity to join a like-minded, top-tier community bank is one that will provide both organizations with significant growth potential,” Nicholas A. Frungillo Jr., Brunswick’s president and CEO, said in a statement. “Together we will continue to provide our clients with valuable opportunities via higher lending limits and a sophisticated technology platform. We are pleased to continue providing service to our valued customers and to the communities in which we live, alongside Rory and his team.”
Following the completion of the merger, Brunswick Bank will be merged with and into Mid Penn Bank. Additionally, one Brunswick director will join the board of directors of Mid Penn Bancorp Inc.
Founded in 1902, Brunswick had $381.6 million in assets, $279.8 million in deposits and $302.5 million in gross loans, as of Sept. 30, 2022.
Mid Penn Bancorp Inc. is headquartered in Harrisburg and is the parent company of Mid Penn Bank and MPB Financial Services LLC. Mid Penn operates retail locations in 16 counties throughout Pennsylvania, including three in Berks, one in Chester and one in Montgomery counties. Mid Penn has total assets in excess of $4.3 billion.