First Bank to Acquire Delanco Bancorp, Inc.

First Bank and Delanco Bancorp, Inc. announced that they have entered into a definitive merger agreement pursuant to which First Bank will acquire Delanco in a stock transaction for total consideration valued at approximately $13.5 million. Upon the closing of the transaction, Delanco Federal Savings Bank, the wholly owned bank subsidiary of Delanco will merge into First Bank. The merger has been unanimously approved by the boards of directors of both institutions. The transaction is expected to be completed in first quarter 2018, subject to the approval of Delanco shareholders as well as customary regulatory approvals.

Delanco is headquartered in Delanco, New Jersey, and serves its customers and communities through two full-service locations in Delanco and Cinnaminson. Delanco Federal Savings Bank has assets of approximately $126 million, loans of $85 million and deposits of $111 million as of June 30, 2017.  Following the merger and its recent acquisition of Bucks County Bank, First Bank will have approximately $1.6 billion in assets with 16 branches located New Jersey and eastern Pennsylvania.

“We believe this to be another solid strategic transaction which expands our service footprint into Burlington County, an area with compelling customer demographics and excellent growth potential,” said Patrick L. Ryan First Bank President and CEO. “In addition, this transaction will further strengthen our balance sheet by diversifying our loan portfolio and providing expanded access to cost-effective retail 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. Also, the Bank’s regulatory capital levels will remain very strong enabling First Bank to continue to evaluate all appropriate growth opportunities.”

“Our board considers this merger to be an excellent opportunity to offer our customers the advantages inherent with a larger bank including enhanced product variety and financial strength, while at the same time maintaining a very customer-centric approach to business,” said James Igo Chairman, President and CEO of Delanco Bancorp, Inc. “We also believe that our shareholders will benefit from ownership in a growing financial institution whose shares enjoy the added liquidity which comes from trading on a national exchange.”

According to terms of the merger agreement, Delanco Bancorp shareholders will receive 1.11 shares of First Bank common stock per each Delanco common share outstanding in an all-stock exchange.  First Bank expects to issue approximately 1,049,422 new shares of First Bank common stock to consummate this transaction.  Based upon First Bank’s October 17, 2017 closing price of $12.75 per share, the transaction is valued at $14.15 per share or approximately $13.5 million in aggregate deal value.  This deal value equates to approximately 99% of Delanco Bancorp’s tangible book value as of June 30, 2017.

Sandler O’Neill + Partners, L.P. acted as financial advisor to First Bank and FinPro Capital Advisors acted as financial advisor to Delanco Bancorp, Inc.  Covington & Burling LLP provided legal counsel to First Bank and Kilpatrick Townsend & Stockton LLP provided legal counsel to Delanco Bancorp, Inc.

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