First Bank Announces Agreement to Acquire Grand Bank, N.A.

HAMILTON, N.J., March 19, 2019 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) and Grand Bank, N.A. announced today that they have entered into a definitive merger agreement pursuant to which First Bank will acquire Grand Bank in a stock transaction valued at approximately $19.4 million. The merger has been unanimously approved by the boards of directors of both institutions and is expected to be completed in the third quarter of 2019, subject to the approval of First Bank and Grand Bank shareholders, as well as customary regulatory approvals.

Grand Bank is headquartered in Hamilton, New Jersey, and serves its customers and communities through two full-service locations. Grand Bank had assets of approximately $197 million, loans of approximately $163 million and deposits of approximately $162 million at December 31, 2018.  Following the merger, First Bank will have approximately $1.9 billion in assets with 18 branches located in seven New Jersey counties and two eastern Pennsylvania counties.

“This strategic transaction strengthens our market position and deposit share in our core Central New Jersey marketplace, while complementing our strong organic growth strategy,” said Patrick L. Ryan, President and Chief Executive Officer of First Bank. “This merger is another example of the high-quality and low-risk transactions we are using to accelerate our growth rate, solidify market position and expand our service area.  Grand Bank’s organizational values and culture are a very good fit with ours, and we are delighted to welcome Grand Bank’s employees to the First Bank team.  In addition, this transaction further strengthens our balance sheet through loan portfolio diversification and provides expanded access to cost-effective retail deposit customers and funding. Importantly, we believe the transaction will be immediately accretive to First Bank earnings per share and we expect there to be minimal dilution to our tangible book value. First Bank’s regulatory capital levels will remain very strong, enabling us to continue to evaluate all appropriate growth opportunities.”

“The shareholders, customers and associates of Grand Bank will all benefit from our merger with First Bank, a financially strong and effectively managed institution,” said Peter Pantages, Chairman, President and Chief Executive Officer of Grand Bank. “First Bank has a very good track record and is successfully executing upon its vision to be a premier multi-market community bank focused on high-touch customer service. Our customers will have access to an expanded set of products and services through the larger combined organization. At the same time, they will continue to receive the highly personalized service they expect. Our employees will benefit by becoming part of an organization which also values their commitment and contribution to the combined Company’s growth and profitability. We view our combination with First Bank as a win for all of our stakeholders, and we look forward to working closely with their team to complete the transaction.”

According to terms of the agreement, Grand Bank shareholders will receive 3,262.956 shares of First Bank common stock per each Grand Bank common share outstanding in an all-stock exchange.  First Bank expects to issue approximately 1.7 million new shares of First Bank common stock to consummate this transaction.  Based upon First Bank’s March 19, 2019 closing price of $11.43 per share, the transaction is valued at approximately $19.4 million in aggregate deal value.  This deal value equates to approximately 87.5% of Grand Bank’s tangible book value as of December 31, 2018.

FIG Partners, LLC and Boenning & Scattergood acted as financial advisors to First Bank and Sandler O’Neill + Partners, L.P. acted as financial advisor to Grand Bank.  Covington & Burling LLP provided legal counsel to First Bank and Windels Marx Lane & Mittendorf, LLP provided legal counsel to Grand Bank.

About First Bank

First Bank is a New Jersey state-chartered bank with 16 full-service branches located in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington, Hamilton, Lawrence, Pennington, Randolph, Somerset and Williamstown, New Jersey, and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. With $1.7 billion in assets as of December 31, 2018, First Bank offers a full range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia corridor. First Bank's common stock is listed on the Nasdaq Global Market under the symbol “FRBA”. 

About Grand Bank, N.A.

Grand Bank, N.A. is a community-oriented financial institution which operates from two offices in Mercer County, New Jersey. Grand Bank conducts a general commercial banking business, principally in the state of New Jersey. Grand Bank’s loan products consist primarily of commercial loans, commercial mortgages, and loans to professionals secured by business or personal assets. Grand Bank offers a complete complement of deposit accounts, including time deposits, checking and other demand deposit accounts, savings accounts, and money market accounts. Grand Bank targets small businesses, professionals, and high net worth individuals as its prime customers. Grand Bank is a privately held Subchapter S corporation.

Forward-Looking Statements

Certain statements contained in this communication may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by reference to a future period(s) or by the use of forward-looking terminology, such as “anticipate,” “estimate,” “expect,” “foresee,” “may,” “might,” “will,” “would,” “could” or “intend,” future or conditional verb tenses, and variations or negatives of such terms. These forward-looking statements include, without limitation, those relating to First Bank’s and Grand Bank, N.A.’s future growth and management’s outlook or expectations for revenue, assets, asset quality, profitability, business prospects, net interest margin, non-interest revenue, allowance for loan losses, the level of credit losses from lending, liquidity levels, capital levels, or other future financial or business performance strategies or expectations.

Readers are cautioned not to place undue reliance on the forward-looking statements contained in this document in that actual results could differ materially from those indicated in such forward-looking statements, due to a variety of factors.  In addition to factors disclosed in First Bank’s reports filed with the Federal Deposit Insurance Corporation (the “FDIC”) and those identified elsewhere in this document, the following factors among others, could cause actual results to differ materially from forward-looking statements or historical performance: changes in First Bank’s operating or expansion strategy, availability of and costs associated with obtaining adequate and timely sources of liquidity, the ability to maintain credit quality, possible adverse rulings, judgments, settlements and other outcomes of pending litigation, the ability of First Bank and Grand Bank, N.A. to collect amounts due under loan agreements, changes in consumer preferences, effectiveness of First Bank’s interest rate risk management strategies, laws and regulations affecting financial institutions in general or relating to taxes, the effect of pending or future legislation, the ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by First Bank and Grand Bank, N.A. shareholders on the expected terms and schedule, delay in closing the merger, difficulties and delays in integrating the Grand Bank, N.A. business or fully realizing cost savings and other benefits of the merger, business disruption following the merger, changes in interest rates and capital markets, inflation, customer acceptance of First Bank’s products and services, customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions and other risk factors.  Any forward-looking statement speaks only as of the date of this document, and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this document.

Annualized, pro forma, projected and estimated numbers are used for illustrative purposes only, are not forecasts, and may not reflect actual results.

Important Additional Information and Where to Find It

In connection with the proposed merger, First Bank will file with the FDIC an offering circular that will include a joint proxy statement/offering circular of Grand Bank N.A. and First Bank and an offering circular of First Bank, as well as other relevant documents concerning the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. SHAREHOLDERS OF GRAND BANK N.A. AND FIRST BANK ARE URGED TO READ THE OFFERING CIRCULAR AND THE JOINT PROXY STATEMENT/OFFERING CIRCULAR REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE FDIC BY FIRST BANK, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

A free copy of the joint proxy statement/offering circular, as well as other filings containing information about First Bank, may be obtained at the FDIC’s Internet site (https://efr.fdic.gov/fcxweb/efr/index.html), when they are filed by First Bank. You will also be able to obtain the offering circular which will include the joint proxy statement/offering circular, when it is filed, free of charge, from First Bank at www.firstbanknj.com under the heading “Investor Relations.” Copies of the proxy statement/offering circular can also be obtained, when it becomes available, free of charge, by directing a request to First Bank, 2465 Kuser Road, Hamilton, NJ 08690, Attention: Patrick L. Ryan, President and CEO, Telephone: (609) 643-0168 or to Grand Bank, N.A., 2297 State Highway 33, Hamilton Square, NJ 08690, Attention: Peter Pantages, Chairman, President and CEO Telephone: (609) 514-3900.

First Bank, Grand Bank N.A., and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of First Bank or Grand Bank N.A., respectively, in connection with the proposed merger. Information about the directors and executive officers of First Bank who may be deemed participants in the proxy solicitation, and their direct and indirect interests, by security holdings or otherwise, will be set forth in the proxy statement for First Bank’s 2019 annual meeting of shareholders, to be filed with the FDIC on Schedule 14A on or about March 22, 2019.  Additional information regarding all of the participants in the solicitation may be obtained by reading the joint proxy statement/offering circular regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.

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