Bar Harbor Bankshares and Lake Sunapee Bank Group have announced that they have signed a definitive merger agreement pursuant to which Bar Harbor will acquire Lake Sunapee in an all-stock transaction valued at approximately $143 million, or approximately $17 per share.
The market-expanding merger is expected to create efficiencies and strategic growth opportunities for both businesses through the leveraging of each other’s platforms and capabilities and will create the only community bank headquartered in New England with a market footprint in all three Northern New England states of Maine, New Hampshire, and Vermont.
It is expected that existing Lake Sunapee Bank branches will continue to operate under the Lake Sunapee brand after the merger is completed.
Under the terms of the merger agreement, each outstanding share of Lake Sunapee common stock will be exchanged for 0.4970 shares of Bar Harbor common stock. Upon closing, Bar Harbor shareholders will own approximately 59% of the combined company’s stock, while Lake Sunapee shareholders will own approximately 41%.
At closing, the combined institution is expected to have approximately $3.3 billion in assets, $2.4 billion in net loans, $2.2 billion in deposits, and over $2.0 billion in assets under management. Bar Harbor will have a pro forma market cap of approximately $350 million and 50 branches serving customers and communities across three states.
Founded in 1868 as Newport Savings Bank, Lake Sunapee operates 35 branches in New Hampshire and Vermont and reported $1.2 billion in net loans and $1.1 billion in deposits as of March 31, 2016. Lake Sunapee’s core operating segments are banking and wealth management. Its wealth management subsidiary, Charter Trust Company, manages over $1.6 billion in assets.
“We are excited to welcome Lake Sunapee customers, employees, and their 35 franchise locations to the Bar Harbor family. This combination represents the joining of two high-performing community banks that have demonstrated a track record of strong financial success, exceptional customer service, and commitment to the communities we serve,” said Curtis Simard, President and Chief Executive Officer of Bar Harbor.
“We believe that together, with our increased scale, expanded geographic footprint, and investments in technology, we are well positioned to serve the marketplace and continue to be the bank of choice. Lake Sunapee’s history of strong asset quality and profitability demonstrates to us a culture similar to our own and positions us for further success.”
Stephen Theroux, Lake Sunapee’s President and Chief Executive Officer expanded, “This merger creates value for the shareholders, customers, and employees of both companies while continuing to provide important contributions to the communities in which we operate. The compatible cultures of our two organizations make this partnership a natural fit. We look forward to working with Bar Harbor and building additional value for our combined shareholders and communities.”
The definitive agreement has been approved by the unanimous votes of the Boards of Directors of both companies. Consummation of the agreement is subject to the approval of both Bar Harbor’s and Lake Sunapee’s shareholders, as well as state and federal regulatory agencies.
The merger is targeted to be completed in the fourth quarter of 2016 or first quarter of 2017. Four Lake Sunapee directors, including Stephen Theroux, will be appointed to Bar Harbor’s board of directors, bringing the total number of directors to 15 at closing.