Mid Penn Bancorp, Inc, headquartered in Harrisburg, Pennsylvania, and Brunswick Bancorp headquartered in New Brunswick, New Jersey, jointly announced the signing of a definitive merger agreement pursuant to which Mid Penn will acquire Brunswick in a combination cash and stock transaction valued at approximately $53.9 million (based upon Mid Penn’s closing stock price of $30.95 for the trading day ending December 19, 2022).
The merger, unanimously approved by both boards of directors, will expand Mid Penn’s footprint into the attractive central New Jersey market. Upon completion of the transaction, Mid Penn will add five total financial centers, four in Middlesex County and one in Monmouth County.
Founded in 1902, Brunswick had $381.6 million in assets, $279.8 million in deposits and $302.5 million in gross loans, as of September 30, 2022. Under Mid Penn’s ownership, Brunswick customers will have access to an expanded product and services offering, with the strength and enhanced lending capabilities afforded by Mid Penn’s larger balance sheet. The transaction creates a combined community banking franchise with approximately $5.0 billion in assets, $4.2 billion in deposits and $3.8 billion in gross loans.
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, subject to proration to ensure that, in the aggregate, 50% of the transaction consideration will be paid in the form of Mid Penn common stock. The purchase price is subject to adjustment in the event 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 transaction is intended to qualify as a reorganization for federal income tax purposes and, as a result, the receipt of Mid Penn common stock by shareholders of Brunswick is expected to be tax-free.
“We are enthusiastic to partner with Brunswick as our first formal step into the dynamic central New Jersey community,” said Mid Penn Chair, President and CEO Rory G. Ritrievi. “Brunswick, under the direction of Executive Chair Frank Gumina, President and CEO Nick Frungillo, Jr. and their strong staff of professionals has built a solid reputation as a dependable bank for the numerous businesses and consumers in the communities they serve. 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.”
“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,” said Nicholas A. Frungillo Jr., Brunswick’s President and Chief Executive Officer. “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.”
Subject to customary closing conditions, including the receipt of regulatory approvals and Mid Penn and Brunswick shareholder approvals, the merger is expected to close in the second quarter of 2023. Following 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.
Stephens Inc. served as financial advisor to Mid Penn in connection with the transaction and Piper Sandler & Co. rendered a fairness opinion to Mid Penn’s board of directors. Pillar+Aught served as legal advisor to Mid Penn in the transaction. Janney Montgomery Scott LLC served as financial advisor to Brunswick in connection with the transaction and rendered a fairness opinion to the Brunswick board of directors. Windels Marx Lane & Mittendorf LLP served as legal advisor to Brunswick.