MVB Financial Corp. MVBF has agreed to buy Integrated Financial Holdings, Inc. in an all-stock deal worth $98 million or $41.79 per share. The closing of the transaction, subject to shareholder and regulatory approvals and the satisfaction of other customary closing conditions, is expected in the first quarter of 2023.
With this acquisition, MVBF will be able to expand its government-guaranteed lending business, including SBA and USDA originations and servicing.
Headquartered in Raleigh, NC, Integrated Financial is the parent company of five wholly owned subsidiaries, including West Town Bank & Trust (WTBT) and Windsor Advantage, LLC.
As of Jun 30, 2022, WTBT had $435 million in total assets, $326 million in loans and $334 million in deposits. Since 2018, WTBT’s government-guaranteed lending team has originated more than $1 billion in loans.
Servicing $2.1 billion in loans, Windsor offers financial institutions a comprehensive outsourced SBA and USDA lending platform.
Per the terms of the deal, shareholders of Integrated Financial will receive 1.21 shares of MVBF’s common stock for each of their shares held.
The deal is expected to be immediately accretive to tangible book value per share at closing. It is also likely to be accretive to earnings per share by 15% in 2023.
MVBF expects the tangible common equity to tangible assets and all regulatory capital ratios to increase pro forma for the transaction.
Larry F. Mazza, the CEO of MVB Financial, stated, “MVB continues to focus on key growth initiatives as part of our MVB-F1: Success Loves Speed Strategic Plan. Even in wet track market conditions, MVB continues to be opportunistic and look for deals that make sense to our business model. This acquisition accelerates both our SBA and Strategic Lending Partnerships growth vehicles to the benefit of our clients and shareholders.”
Upon deal closure, Integrated Financial’s president and CEO, Eric Bergevin, will join MVBF’s executive leadership team and will directly report to Mazza. The EVP of government lending for Integrated Financial, Riddick Skinner, along with Michael Breckheimer, EVP of corporate strategy, will report to Bergevin.
So far this year, shares of MVBF have lost 14.5% compared with a decline of 10.4% for the industry.
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Currently, MVBF carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Growth Efforts by Other Finance Companies
Banks like Truist Financial TFC and Citizens Financial Group, Inc. CFG are undertaking opportunistic acquisitions to diversify revenues and improve market share.
Earlier this month, TFC, through its subsidiary, Truist Insurance Holdings, entered an agreement to buy the nation’s largest benefits wholesale general agency, BenefitMall, from funds managed by The Carlyle Group Inc. While the financial terms of the deal have not been disclosed yet, the transaction is expected to close in the third quarter of 2022.
The acquisition is expected to add $150 million in annual revenues to Truist Insurance Holdings’ wholesale division.
Likewise, Citizens Financial is on a buyout spree. This July, the company announced plans to acquire Paladin Advisors, an independent, registered investment advisor, to strengthen its private wealth management business.
Earlier, CFG closed the acquisitions of DH Capital LLC and Investors Bancorp. In February, it closed the buyout of 80 East Coast branches and the national online deposit business from HSBC Bank U.S.A, N.A. These and other buyouts enable the company to expand its product capabilities and geographic reach.
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