Independent Bank Corp., parent of Rockland Trust Company, and MNB Bancorp, parent of The Milford National Bank and Trust Company, have signed a definitive merger agreement for Independent Bank Corp. to acquire MNB Bancorp and Rockland Trust to acquire Milford National. The parties anticipate that the transaction will close in the fourth quarter of 2018. Milford National was founded in 1849 and has continuously served Milford, Massachusetts and surrounding towns since its inception. Milford National currently has three Worcester County bank branches, two in Milford and one in the adjacent community of Mendon, Massachusetts. As of March 31, 2018, Milford National had $301M in deposits, with a current overall cost of deposits of 0.40%, and $308M in loans with a current yield of 4.71%. Milford National's wealth management business, which is also being acquired by Rockland Trust, had $167M of assets under administration. Independent anticipates issuing approximately 528,375 shares of its common stock in the merger. Based upon Independent's $76.80 per share closing price on May 25, 2018, the transaction is valued at approximately $54.2M. Independent intends to fund the cash portion of the consideration from internal sources. Independent anticipates that the acquisition will be approximately 10c accretive to its 2019 earnings, excluding one-time costs. Independent estimates that the transaction will generate an internal rate of return of about 19% and expects the transaction will be approximately 1.2% dilutive to tangible book value per share. One-time expenses attributable to the merger are expected to be approximately $5.3M after tax, in the aggregate, incurred in 2018 and 2019. The boards of directors of each company have unanimously approved the transaction. The transaction is subject to certain conditions, including the receipt of required regulatory approvals, approval by MNB shareholders, and other standard conditions. Independent shareholders do not need to approve the merger. MNB directors and principal shareholders who currently own, in the aggregate, about 67% of MNB's outstanding shares have signed voting agreements pursuant to which they have agreed to vote their shares in favor of the merger.
