ROCKLAND, Mass. & EDGARTOWN, Mass.--(BUSINESS WIRE)--Independent Bank Corp. (NASDAQ: INDB), parent of Rockland Trust Company, and Island Bancorp, Inc., parent of The Edgartown National Bank, have signed a definitive merger agreement for Independent to acquire Island Bancorp and Rockland Trust to acquire Edgartown National. The parties anticipate that the consummation of the transaction will occur in the second quarter of 2017.
Edgartown National was chartered in 1905 and has continuously served the people and communities of Martha’s Vineyard since its inception. Edgartown National currently has four bank branches in the Martha’s Vineyard communities of Edgartown, where it has two locations, Oak Bluffs, and Vineyard Haven, all in Dukes County Massachusetts. Edgartown National currently has approximately $171 million in deposits and approximately $153 million in loans. Rockland Trust intends to operate all Edgartown National bank branches when the transaction closes.
“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,” said Christopher Oddleifson, the President and Chief Executive Officer of Independent and Rockland Trust. “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,” said Fielding Moore, the Chief Executive Officer of Edgartown National. “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% stock/20% 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 issuing approximately 369,311 shares of its common stock in the merger. Based upon Independent's $53.25 per share closing price on October 19, 2016 the transaction is valued at approximately $24.5 million and the aggregate consideration represents 151.8% of Island Bancorp’s tangible book value as of September 30, 2016.
Independent anticipates that the acquisition will be approximately three to four cents (i.e., $0.03 to $0.04) accretive to its 2018 earnings. Independent estimates that the transaction will generate an internal rate of return of about 20% and expects the transaction will be neutral to tangible book value per share. One-time expenses attributable to the merger are expected to be approximately $2.4 million after tax, in the aggregate, incurred in 2016 and 2017.
The boards of directors of each company have unanimously approved the transaction. The transaction is subject to certain conditions, including the receipt of required regulatory approvals, approval by Island Bancorp shareholders, and other standard conditions. Independent shareholders do not need to approve the merger. Island Bancorp directors who currently own, in the aggregate, about 33% of Island Bancorp’s outstanding shares have signed voting agreements pursuant to which they have agreed to vote their shares in favor of the merger.
Independent used Day Pitney LLP as its legal counsel and received a fairness opinion from Sandler O’Neill + Partners. Island Bancorp was advised by FIG Partners, LLC and used Cranmore, FitzGerald & Meaney as its legal counsel.
About Independent Bank Corp.
Independent Bank Corp., which has Rockland Trust Company as its wholly-owned commercial bank subsidiary, has $7.5 billion in assets. Rockland Trust offers a wide range of commercial banking products and services, retail banking products and services, business and consumer loans, insurance products and services, and investment management services. To find out why Rockland Trust is the bank “Where Each Relationship Matters®”, visit www.RocklandTrust.com.
About Island Bancorp, Inc.
Island Bancorp, Inc., which has Edgartown National Bank as its wholly-owned commercial bank subsidiary, has $194 million in assets. Edgartown National offers commercial and retail banking products and services, and business and consumer loans through its four (4) office network on the island of Martha’s Vineyard. For additional information regarding Edgartown National, visit www.YourIslandBank.com.
