DeWITT, N.Y. — Community Bank System, Inc. announced it has agreed to acquire Kinderhook Bank Corp., parent company of National Union Bank of Kinderhook, for $93.4 million in cash to expand its presence in New York’s Capital District region.
Kinderhook Bank, which was founded in 1853, brings Community Bank 11 branches across the counties of Albany (3), Columbia (5), Fulton (1), Montgomery (2), and Rensselaer (1). It has total assets of nearly $640 million and deposits of $560 million.
Community Bank System (ticker symbol: CBU), based in DeWitt, has $10.6 billion in assets and more than 230 branches across upstate New York, northeastern Pennsylvania, Vermont, and western Massachusetts through its main banking unit, Community Bank, N.A.
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“Our acquisition of Kinderhook Bank Corp. will extend our banking footprint into the attractive Capital District markets which are similar to the other Upstate New York markets in which we successfully compete,” Mark E. Tryniski, president and CEO of Community Bank System, said in a news release. “Our move to establish a broader and deeper banking presence in this region reflects the relative economic, demographic and geographic attractiveness of the area. This investment also complements the financial commitment we made in 2018 when we added an experienced commercial banking team focused on the greater Albany area. We’re pleased with the results of this activity to date and confident that the Kinderhook franchise will further support our efforts to grow our retail and business banking presence in the Capital District.”
Under the terms of the agreement, shareholders of Kinderhook Bank Corp. (ticker: NUBK) will receive $62 in cash for each share of Kinderhook they own. This price represents, assuming full conversion of preferred equity, is 193 percent above (or nearly triple) Kinderhook Bank Corp.’s tangible book value as of Sept. 30, 2018, per the release.
The acquisition is expected to close in the second quarter of this year and is subject to customary closing conditions, including approval by the shareholders of Kinderhook Bank Corp. and required regulatory approvals. The transaction has already been unanimously approved by the boards of directors of both banking companies.
Upon completion of the acquisition, Community Bank System says it will have about $11.3 billion in assets. It expects the deal to add about 7 to 8 cents to its first full year of earnings per share, and add 9 to 10 cents a share to its cash earnings, excluding any one-time transaction costs.
Contact Rombel at arombel@cnybj.com
