Gardner-based GFA Federal Credit Union has reached an agreement to acquire New Hampshire-based Monadnock Community Bank for about $6.4 million in cash.
GFA said in a statement that the purchase price covers "substantially all" of Monadnock’s assets and liabilities. Monadnock is a one-office bank based in Peterborough, and converted to a federal savings bank from a credit union charter in 1996.
The purchase price works out to be about $5.50 cash for each of Monadnock’s 1.164 million outstanding shares of common stock. The price represents 119 percent of tangible book value, 13.1 percent price-to-deposits and a 2.73 percent premium on core deposits as of Dec. 31.
The Monadnock office will become a branch of GFA, making it GFA’s ninth full-service branch.
GFA has assets of about $429 million. Monadnock’s assets were $82 million as of Dec. 31.
If approved by regulators, the acquisition would be the first of a bank for GFA and the first such acquisition nationally by a credit union of a stock savings bank, GFA said in a statement.
Pending approvals from the shareholders of Monadnock and both entities’ regulators, as well as satisfaction of customary closing conditions, including the repayment of TARP funds by Monadnock, the parties said they anticipate that the transaction will close in the fourth quarter of 2012.
Monadnock reported a $1.8 million loss for 2011, according to regulatory filings.
It is anticipated that all of the Monadnock board members will join an advisory board of GFA.
Sterne, Agee & Leach acted as financial advisor to GFA while Michael M. Bell, Esq. of Kotz, Sangster, Wysocki P.C. provided legal counsel to GFA. Loomis & Co. Inc. served as financial advisor to Monadnock in the transaction, and Richard S. Garabedian of Luse, Gorman, Pomerenk and Schick, P.C. served as legal counsel to Monadnock.
GFA CEO Tina M. Sbrega was not available for direct comment Thursday afternoon.
But in a statement, Sbrega said, "We look forward to building upon the tradition of customer service and community commitment and bringing greater convenience not only to Monadnock customers but to the members of GFA as well."
Sbrega also noted that this extension of GFA’s footprint further into New Hampshire fits well with recent strategic growth initiatives.
