Nine months after its planned merger with a Pennsylvania bank ended over delays in regulatory approval, CMS Bancorp Inc. in White Plains has agreed to be acquired by Putnam County Savings Bank in Brewster in an approximately $25.4 million cash deal.
The merger, expected to close in the first half of 2015, will add five CMS Bank retail branches in Westchester County to the Brewster mutual savings bank”™s existing 10-branch network in Putnam, Rockland, Dutchess and northern Westchester counties. CMS Bancorp is the holding company for CMS Bank, a stock savings bank with branches in Eastchester, Greenburgh, Mount Vernon, West Harrison and Mount Kisco.
If the deal is approved by CMS stockholders and banking regulators, those branch offices will operate under the Putnam County Savings Bank name, officers at the two bank companies said in a joint press release. One CMS director will join the PCSBÂ board of trustees.
The merging banks said the all-cash transaction is valued at $13.25 per share of CMS stock. Sales of CMS Bancorp Inc. stock on the Nasdaq closed at $11.47 per share on Sept. 25, the day the merger agreement was announced, and at $12.87 per share Tuesday.
CMS Bancorp officers in August 2012 announced a merger agreement with Customers Bancorp Inc., a suburban Philadelphia bank company that operates two New York branches, including one at Rye Ridge Shopping Center in Rye Brook. That deal, which would have exchanged CMS stock for shares of Customers Bancorp stock, was valued at approximately $20.8 million.
CMS terminated the agreement in December 2013 after the Pennsylvania bank failed to make all regulatory filings required to have the purchase approved by regulators.
Joseph D. Roberto, president and CEO of Putnam County Savings Bank, said his bank began discussions with CMS Bancorp “after that deal fell through” with Customers Bank. With three well-established branch offices in Somers, Yorktown and Jefferson Valley, “We had strategically planned to get more involved in the Westchester market,” he said. “We felt that was a natural expansion for us.”
With the pending acquisition, “We”™ve now created a nice footprint for the franchise stretching from Dutchess all the way down into southern Westchester and a little into Rockland,” Roberto said. Putnam Savings last November opened a branch across the Hudson in New City.
Roberto noted the five CMS branches to be acquired do not overlap with Putnam Savings Bank”™s existing branches and all will remain in operation.
Roberto said Putnam Savings, which was founded in 1871, will continue the personalized service for which both banks in the deal are known. “We”™re going to bring our community style of banking with us,” he said.
John E. Ritacco, president and CEO of CMS, in the deal announcement said CMS stockholders “will benefit from the all-cash terms of the merger agreement. Our customers will gain access to a deeper level of products and quality services provided by a strong and committed local community bank, and CMS will serve as a platform for Putnam”™s deeper expansion in the Westchester market.”
As of June 30, Putnam County Savings Bank had total assets of $975.8 million, deposits of $860.8 million and stockholders’ equity of $111.6 million. CMS Bancorp Inc. had total assets of $273 million, deposits of $228.1 million and stockholders’ equity of $23.8 million.
Putnam County Savings Bank retained Luse Gorman Pomerenk & Schick PC, a Washington, D.C., law firm, as legal counsel in the transaction and FinPro Capital Advisors Inc. as financial adviser. Paul Hastings LLP in New York City acted as legal counsel and Sandler O’Neill and Partners LP was financial adviser to CMS.
