| Independent Bank Corp. will acquire Island Bancorp for about $24.5 million in the second quarter of next year, the Rockland Trust parent announced late on Thursday.
Rockland Trust will expand its reach into Martha’s Vineyard with the acquisition of Edgartown National Bank, adding Edgartown’s $171 million in deposits and $153 million in loans to its balance sheet. Independent said in its statement that it also intends to keep open all four of Edgartown National’s branches, all located within Dukes County.
“Rockland Trust already has many customer relationships with close ties to Martha’s Vineyard, so we welcome the opportunity to expand our Martha’s Vineyard physical presence by joining Edgartown National with Rockland Trust,” Christopher Oddleifson, president and CEO of Independent and Rockland Trust, said in a statement. “It is a natural expansion and strengthening of our Cape Cod franchise. Edgartown National and Rockland Trust share the same values, and are committed to the communities they serve and the families that live in them. We look forward to welcoming Edgartown National colleagues and customers to Rockland Trust.”
“We are extremely pleased to join Rockland Trust, a growing bank with a terrific brand,” Edgartown National CEO Fielding Moore said. “Our customers will enjoy the greater range of products, services, and convenience that Rockland Trust offers while still being served by the same Edgartown National customer service staff they know and trust.”
Under the merger agreement each share of Island Bancorp stock will be exchanged for either 9.525 shares of Independent common stock or $500 in cash, subject to customary pro-ration procedures which will result in an aggregate stock/cash consideration mix of 80 percent stock/20 percent cash. The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes and to provide a tax-free exchange for Island Bancorp shareholders who receive Independent common stock as consideration.
Independent anticipates it will issue approximately 369,311 shares of its common stock in the merger. Based upon Independent’s $53.25 per share closing price on Oct. 19, the transaction is valued at approximately $24.5 million and the aggregate consideration represents 151.8 percent of Island Bancorp’s tangible book value as of Sept. 30.
Executives at Independent anticipate the deal will be about three to four cents accretive to its 2018 earnings, will generate an internal rate of return of about 20 percent and will be neutral to tangible book value per share.
One-time expenses attributable to the merger are expected to be about $2.4 million after tax, in the aggregate, incurred in 2016 and 2017.
Both company’s boards of directors have approved the merger, and it now awaits approval by regulators and Island Bancorp shareholders. Island Bancorp directors, who own about 33 percent of its outstanding shares, have already agreed to vote their shares in favor of the deal.
