Community Bank to acquire Vermont bank for $304 million

DeWITT, N.Y. — Community Bank System, Inc. (NYSE: CBU) today announced it will acquire Merchants Bancshares, Inc. (NASDAQ: MBVT), the largest statewide independent bank in Vermont, in a cash and stock transaction worth about $304 million. 

The deal has been unanimously approved by the boards of directors of both companies.

Merchants Bancshares, parent company of Merchants Bank, has total assets of nearly $1.9 billion, deposits of $1.5 billion, and 32 banking offices. Merchants is the third largest bank by deposit market share in Vermont and has a growing business in western Massachusetts, Community Bank said in a news release.

The deal will expand 150-year-old, DeWitt–based Community Bank into Vermont. The bank currently operates more than 200 branches across upstate New York and northeastern Pennsylvania.

Under the terms of the agreement, shareholders of Merchants Bancshares will have the option to receive either 0.963 shares of Community Bank System common stock, $40 in cash, or a combination of 0.6741 shares of Community Bank System common stock and $12 in cash — subject to adjustments that make sure the deal is 70 percent stock and 30 percent cash. 

The cash and stock combination is valued at $44.02 for each share of Merchants Bancshares common stock based upon the closing price of Community Bank System common stock as of Oct. 21, Community Bank said.

“We are very excited to be partnering with Merchants Bank, extending our footprint into the attractive Vermont and Western Massachusetts markets,” Community Bank System President and CEO Mark E. Tryniski said in the release. 

Merchants Bancshares’ stock was trading up $9.90, or 30 percent, to $42.75, as of 2:50 p.m. this afternoon. Community Bank System shares were down, 90 cents, or nearly 2 percent, to $46.60.

For much more on this acquisition, check out the Banking & Wealth Management report in the Oct. 31 issue of The Central New York Business Journal.

Contact Rombel at arombel@cnybj.com