Delmar Bancorp, parent company of The Bank of Delmarva, and Liberty Bell Bank, Marlton, NJ, are proceeding with a merger announced earlier this summer
The deal is valued at $16 million. Delmar Bancorp is based in Salisbury, MD. The main bank subsidiary’s headquarters are located in Seaford.
Delmar expects to recover at closing of the transaction $6.1 million of Liberty’s $6.8 million valuation reserve on its deferred tax asset, due to the significant common ownership of Delmar and Liberty (they share the same largest shareholder), providing a unique opportunity for Delmar and Liberty shareholders.
With the valuation reserve recovery, the value of the transaction represents approximately all of Liberty’s tangible book value.
Delmar expects that the transaction will add to Delmar’s earnings within 12 months
Following closing of the merger, and will result in modest dilution to tangible book value, which is expected to be earned back in approximately three years.
The acquisition of Liberty, with three branches in Burlington and Camden Counties, will be Delmar’s initial entry into the Southern New Jersey/Suburban Philadelphia market.
The merger will enable Delmar to enhance its growth opportunities by leveraging its larger capital base and legal lending limit with Liberty’s customer base.
Liberty has about $150 million in assets, $121.2 million in loans and $136.5 million in deposits.
On a pro forma basis, as of March 31, the combined company would have $668.6 million of assets, $556.1 million in loans and $575 million in deposits.
Kenneth R. Lehman currently serves on the Board of Directors of both Liberty and Delmar. In connection with the merger, two additional members of the Board of Directors of Liberty will join the Board of Directors of Delmar and Delmarva. Liberty will continue to operate under the name “Liberty Bell Bank, a division of The Bank of Delmarva”.
Lehman is a major shareholder in both banks, which previously struggled with losses.
The merger is expected to close in the fourth quarter of 2017 or first quarter of 2018.
John W. Breda, CEO of Delmar and Delmarva said in late July, “We are extremely excited about the proposed acquisition of Liberty and the transformative opportunities the combination creates for us. We are familiar with the market and believe that it provides substantial opportunities for growth of the combined bank. We look forward to serving Liberty’s customers with our portfolio of deposit, cash management, and loan products for businesses and consumers. We plan to work very closely with the Liberty team to provide a seamless transition, and make Liberty’s customers feel that nothing has changed, except our capacity to serve them. Having just assumed the role of President and CEO of Delmar, I am very proud and eager to lead it into a new market and new opportunities.”
Delmar Bancorp is the holding company for The Bank of Delmarva, which commenced operations in 1896. Delmarva’s main office is in Seaford and it conducts full service commercial banking through 10 offices, soon to be 11, located in Wicomico and Worcester Counties in Maryland, and Sussex County in Delaware.
Liberty Bell Bank has two additional full service offices in Moorestown and Cherry Hill.