Bank on Buffalo and the Bank of Akron are merging.
The $64.5 million deal, announced late Wednesday afternoon, will combine two small Buffalo Niagara banks and create a combined institution that has almost double the market share of each of the two individual banks within Erie County.
The merger will combine Bank of Akron, which has six branches in Erie and Niagara counties, with Bank on Buffalo, a relative newcomer to the Buffalo Niagara market that has four branches in the region. Bank of Akron branches will be rebranded under the Bank on Buffalo name.
Together, the combined bank will have 10 branches and more than $750 million in deposits, giving it more heft to compete in a Buffalo Niagara banking market that is dominated by M&T Bank.
Under the deal, Bank on Buffalo’s Pennsylvania-based parent company, CNB Financial Corp., will pay $215 per share in cash and stock to acquire Bank of Akron, whose rarely traded shares last traded for $177 per share in late October. That’s a 21% premium over its last reported price.
The deal combines two banks that have relatively little overlap in their branch network and will push Bank on Buffalo into new markets in Lancaster and northern Niagara County, while also bolstering its physical position in Buffalo’s northern suburbs.
Bank on Buffalo has offices in Buffalo, Williamsville, Orchard Park and Niagara Falls, while Bank of Akron has two locations in Akron, as well as branches in Clarence, Clarence Center and Lancaster.
Martin T. Griffith, the Bank on Buffalo president, will remain in that role following the merger. Anthony J. Delmonte Jr., the president and chief executive officer of Bank of Akron, is expected to stay on with the bank as a market executive following the merger.
“We are excited to expand our franchise into the neighboring New York markets, and to partner with such a strong earning, high-performing bank,” said Joseph B. Bower, Jr., president and CEO of CNB Financial, Bank on Buffalo’s parent company, based in Clearfield, Pa.
“There are many similarities between the markets of Bank of Akron and our existing CNB locations, as well as with our personal approach to banking,” Bower said in statement. “A larger presence in the Western New York area will provide us additional growth opportunities.”
Bank on Buffalo, which has aggressively grown its deposit base by offering savings accounts that pay 2% interest, is currently the seventh-biggest bank in Erie County, based on deposits, according to the Federal Deposit Insurance Corp. Bank of Akron is ranked eighth.
But those each of the banks have less than 1% of all deposits within Erie County – a market dominated by M&T and its 64% market share, according to FDIC data.
The merger will create a bank that has about a 1.7% share of all deposits within Erie County, trailing Evans Bank, which ranks sixth with 2.7%. In a banking market where M&T dominates and KeyBank is a distant second, with a 16% deposit share, no other bank has more than a 6% share of the deposits within Erie County, creating a highly competitive scramble for customers among the region’s smaller banks.
“Leveraging CNB’s infrastructure and community banking products, and having access to the capital to continue to grow our business will serve our customers and communities well,” Delmonte said in a statement.
“CNB has a successful community banking model and has shown consistent growth, high returns and strong stock price performance,” he said. “We are excited to bring together two strong community minded banks, serving the Erie and Niagara counties”
CNB officials said they expect the deal to add to its profits within the first full year of operations. The deal still must be approved by shareholders and regulators.
Source: The Buffalo News
