Indiana-based S&T Bancorp Inc., holding company for S&T Bank and its approximately 60 locations in Pennsylvania, Ohio and New York, has signed an agreement to acquire DNB Financial Corporation, holding company for DNB First and its 14 locations in Greater Philadelphia.
“I am very pleased to announce our merger with DNB, a nearly 160-year-old institution which shares the values, culture and commitment to high quality customer service found at S&T Bank,” S&T CEO Todd D. Brice said Wednesday afternoon.
In an interview with The Indiana Gazette, Brice said it was the largest acquisition by S&T in terms of assets. DNB, based in Downingtown, Chester County, has $1.15 billion in assets, while S&T has $7.3 billion.
“They have a very similar culture, the way they engage their employees, the way they serve their customers, and the way they support their communities,” Brice said. “At the end of the day we think combining both of our organizations will be very beneficial for customers and shareholders.”
S&T will acquire DNB in an all-stock transaction. DNB shareholders will receive 1.22 shares of S&T stock for each share of DNB stock. Based on S&T’s Tuesday closing price of $38.75 per share, the transaction will have an aggregate value of approximately $206 million, or $47.28 per share.
“S&T is a high performing company, as evidenced by its superior earnings and consistently high dividend payments, proven management team and 100-plus year history of responsiveness to the customers and communities it serves,” DNB CEO William J. Hieb said in a press release.
S&T currently operates in western and central Pennsylvania, northeast and central Ohio, and upstate New York.
“Merging with such a venerable institution located in a growing southeastern Pennsylvania market dovetails nicely with our expansion into the central Pennsylvania market in 2015,” Brice said, “and our overall strategic growth strategy focused on Pennsylvania, Ohio and New York.”
That strategy has taken S&T to such markets as Harrisburg; Akron and Columbus, Ohio; and Rochester, N.Y. Last month S&T said it would open a loan production office in Buffalo, N.Y.
DNB primarily is in Chester County, where it has 10 offices, with other locations in Philadelphia’s East Falls and Roxborough neighborhoods as well as Boothwyn and Chadds Ford in Delaware County.
“They are a very well-run organization,” Brice said. “They operate in great markets.”
DNB First offers a broad array of consumer and business banking products, as well as brokerage and insurance services through DNB Investments & Insurance and investment management services through DNB Investment Management & Trust.
More than 1,000 are employed by S&T, while DNB has approximately 170 employees.
“With S&T, our customers will continue to enjoy all the benefits of a relationship-driven bank, with access to continued technology investments, expanded lending capacity, and a deeper and broader range of financial products and services,” Hieb said.
Keefe, Bruyette & Woods Inc. acted as exclusive financial adviser to S&T. PNC FIG Advisory Inc. served the same role for DNB.
Wachtell, Lipton, Rosen & Katz served as counsel to S&T, while Stradley, Ronon, Stevens & Young had that role for DNB.
Terms of the merger agreement were unanimously approved by the boards of directors of both companies. The two banks said the transaction is expected to be a tax-free exchange to the shareholders of DNB.
Brice said the two banks anticipate closing the deal on Nov. 30, pending the appropriate regulatory approvals.
Then, he said, “we would look to convert their IT systems on Feb. 10, 2020.”
S&T scheduled a conference call this morning to discuss the merger. It plans to archive the webcast of that call for at least 90 days on its www.stbancorp.com website.