DNB Financial Corporation to Acquire East River Bank

DOWNINGTOWN, Pa., April 04, 2016 (GLOBE NEWSWIRE) — DNB Financial Corporation (“DNB”) (NASDAQ:DNBF) and East River Bank of Philadelphia, announced today that they have executed a definitive agreement under which DNB will acquire East River in a stock and cash transaction for total consideration valued at $49.0 million. DNB is the parent company of DNB First, National Association, a community bank headquartered in Downingtown, Pennsylvania. As of December 31, 2015, East River reported $311 million in assets, total loans of $282 million, and total deposits of $234 million; it operates three full-service offices in Philadelphia. [http://resource.globenewswire.com/Resource/Download/fb8bd034-456f-4a51-8640-0c1131138a54?size=2]<http://www.globenewswire.com/NewsRoom/AttachmentNg/fb8bd034-456f-4a51-8640-0c1131138a54> Under the terms of the agreement, East River shareholders will be entitled to elect to receive either 0.6562 shares of DNB common stock or $18.65 in cash for each outstanding share of East River common stock, subject to pro-ration such that the aggregate cash consideration payable to East River shareholders will be $6.7 million (subject to increase in the event that outstanding options are exercised prior to closing). The acquisition is expected to be immediately accretive to DNB earnings per share, excluding one-time costs. The transaction value to East River common shareholders equates to 155% of East River’s tangible book value as of December 31, 2015 and 21.2 times East River’s 2015 full year earnings. Tangible book value dilution is acceptable with an earn-back period from the transaction of 3.9 years. The transaction has an anticipated internal rate of return of 18%, which is well in excess of DNB’s cost of capital. When the acquisition is completed, DNB will have approximately $1.1 billion in assets, $764 million in loans, and $841 million in deposits, with 15 branch offices in Chester, Delaware and Philadelphia counties. It will become one of only six institutions with total assets of more than $1 billion, headquartered in Southeastern Pennsylvania. “DNB and East River is a powerful combination that will benefit our respective customers, investors, employees and communities,” said William J. Hieb, president and chief executive officer of DNB. “This transaction will establish a much stronger institution and create efficiencies to generate greater earnings for our combined shareholder base. It will also allow us to deliver a comprehensive set of financial products and services to consumers and businesses throughout our region, with logical expansion into the attractive Philadelphia market, positioning us for continued growth.” “This transaction provides our shareholders with greater liquidity and the opportunity to build upon the success of the DNB franchise,” said Christopher P. McGill, president and chief executive officer of East River. “In addition to a shared legacy of strong financial performance and community engagement, the strategic synergy and cultural fit between our two banks present exciting opportunities to all of our stakeholders. As East River’s lending team joins DNB, an enhanced product set and higher lending limits will enable us to better serve our clients in Philadelphia. We look forward to being part of the DNB team.” Mr. McGill will join DNB as executive vice president and chief business development officer. Jerry L. Cotlov, executive vice president and chief lending officer of East River, will also join DNB as senior vice president and assistant chief commercial lending officer. John F. McGill, Jr., chairman of East River, will join the DNB board of directors as vice chairman; two other members of the East River board of directors, Charles A. Murray and Daniel O’Donnell, will also join the DNB board as independent directors. James H. Thornton will continue to serve as chairman of the DNB board. The acquisition, which is subject to regulatory approval, the approval of shareholders of DNB and East River and other customary closing conditions, is expected to close during the second half of 2016. Ambassador Financial Group, Inc. served as financial advisor to DNB Financial Corporation; Stradley Ronon Stevens & Young, LLP served as legal counsel. Griffin Financial Group LLC served as financial advisor to East River Bank; Silver, Freedman Taff & Tiernan LLP served as legal counsel. About DNB Financial Corporation DNB Financial Corporation is a bank holding company whose bank subsidiary, DNB First, National Association, is a community bank headquartered in Downingtown, Pennsylvania with 12 locations. Founded in 1860, DNB First, in addition to providing a broad array of consumer and business banking products, offers brokerage and insurance services through DNB Investments & Insurance and investment management services through DNB Investment Management & Trust. DNB Financial Corporation’s shares are traded on NASDAQ’s Capital Market under the symbol: DNBF. We invite our customers and shareholders to visit our website at http://www.dnbfirst.com<http://www.globenewswire.com/Tracker?data=A-V0kjPJNFrXXum-WUBbaPqtcH5o0QXQNZg5ZtD5eVONrR1ZyMqDc1FtUrnrfv-s39cSWrUgLrRhofTGfw4D89nmcFR1ta3UerHgudCg_pI=>>. DNB’s Investor Relations site can be found at http://investors.dnbfirst.com<http://www.globenewswire.com/Tracker?data=A-V0kjPJNFrXXum-WUBbaGL8StxbxNxhfMaNlKnFl26yBDs2k4klsx4jea6Op7XW8BAL8P7LUCmAJuQcpbI7nGUOofM9CRtUnFLpNHXyu00=>>. About East River Bank East River Bank is a Pennsylvania-chartered savings bank headquartered in the East Falls neighborhood of Philadelphia, Pennsylvania. Founded in 2006, East River Bank provides personal and business lending and deposit services through three locations in Philadelphia, Pennsylvania. We invite our customers and shareholders to visit our website at http://www.eastriverbank.net<http://www.globenewswire.com/Tracker?data=A-V0kjPJNFrXXum-WUBbaLNMvhiEhVv3fksJDhpyjyTgNKYT32YYEC3V2xjmo1Jfi0MnoRUU1g80dKQyWS4C_gO0_FcStjuJm9KSjNvhrnk=>>.

DNB Financial Corporation to Acquire East River Bank
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