Monadnock Bancorp, Inc. (Monadnock Community Bank) (OTC Bulletin Board: MNKB) announced that, at its annual meeting of shareholders held earlier, 766,913 shares representing more than 99 percent of its shareholders that voted (or 66 percent of the outstanding shares), voted to approve the purchase and assumption agreement under which GFA Federal Credit Union (GFA), will acquire substantially all of the assets and assume substantially all of the liabilities of Monadnock Community Bank, the wholly-owned subsidiary of Monadnock, for approximately $6.4 million in cash.
Headquartered in Peterborough, Monadnock had assets of approximately $82.7 million at December 31, 2011. Monadnock Community Bank converted from a New Hampshire-chartered credit union to a federal savings bank in 1996.
Under the terms of the agreement, the $6.4 million purchase price equates to approximately $5.50 in cash for each of the 1.164 million outstanding shares of Monadnock common stock. The price represents 119 percent of tangible book value, a 13.1 percent price to deposits, and a 2.73 percent premium to core deposits, based on December 31, 2011 financials.
The bank will become a full-service GFA branch, and GFA will serve customers through nine branches, seven in north central Massachusetts and two in NH, with combined assets of approximately $429 million and deposits of approximately $318.3 million. This is the first bank acquisition for GFA and if approved the first such acquisition nationally by a credit union of a stock savings bank. Overall, this acquisition will be only the second acquisition of a savings bank by a credit union.
William M. Pierce, Jr., president and CEO of Monadnock Community Bank, said, We are pleased that our shareholders voted to join GFA Federal Credit Union. This new partnership will not only expand service to our customers, communities and employees but will ensure to continue the same care and commitment characteristic of Monadnock.
Monadnock Community Bank has served its members and community well for over 40 years, said GFA President and Chief Executive Officer Tina M. Sbrega. We look forward to building upon the tradition of customer service and community commitment and bringing greater convenience not only to Monadnock customers but to the members of GFA as well. Sbrega also noted that this extension of GFA's footprint further into New Hampshire fits well with recent strategic growth initiatives.
Pending approvals from both entities' regulators, as well as satisfaction of customary closing conditions, including the repayment of TARP funds by Monadnock, the parties anticipate that the transaction will close in the fourth quarter of 2012. It is anticipated that all of the Monadnock board members will join an advisory board of GFA.
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