By Lisa Kerner
Charlotte, N.C., Dec. 19 - M&T Bank Corp. agreed to acquire Provident Bankshares Corp. in a stock-for-stock transaction valued at about $401 million.
Provident shareholders will receive 0.171625 shares of M&T common stock in exchange for each share of Provident common stock they own, an M&T news release said.
Under the terms of the merger agreement, Provident preferred stock will be exchanged for shares of preferred stock of M&T, and holders of Provident stock options will receive M&T stock options.
Both companies' board of directors approved the transaction, which is slated to close late in the second quarter of 2009.
M&T expects the transaction to be accretive to GAAP and operating earnings per share in 2010. The company said it also estimates its internal rate of return on the investment to exceed 16%.
By acquiring Provident, M&T will add 143 branch offices and 198 ATMs, located mainly in Maryland and Virginia, to M&T's current total of 177 branches and 545 ATMs in the same region.
"While other banks have been scaling back growth, curtailing lending and laying off employees, M&T is continuing to invest in the Mid-Atlantic, where we have opened, renovated or relocated 30 branches since 2007," Atwood "Woody" Collins III, president of M&T's Mid-Atlantic division, said in the release.
"M&T has significant operations in Maryland and Virginia, and we will be able to offer comparable employment opportunities to all of Provident's customer contact employees, and to substantial numbers of their other employees," Collins added.
Keefe, Bruyette and Woods, Inc. advised M&T. Provident was advised by Sandler O'Neill + Partners, LP.
Buffalo-based M&T is the holding company for M&T Bank and M&T Bank, NA. It operates branch offices in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Jersey and the District of Columbia.
Provident is the holding company for Baltimore-based Provident Bank.
| Acquirer: | M&T Bank Corp.
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| Target: | Provident Bankshares Corp.
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| Announcement date: | Dec. 19
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| Transaction total: | $401 million
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| Price per share: | 0.171625 M&T shares
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| Expected closing: | Second quarter of 2009
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| Stock price for acquirer: | NYSE: MTB: $59.72 on Dec. 18
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| Stock price for target: | Nasdaq: PBKS: $5.80 on Dec. 18
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