NEW YORK (CNNfn) - Summit Bancorp extended its reach in the eastern Pennsylvania banking market Thursday by agreeing to buy Prime Bancorp for about $292 million.
Summit, based in Princeton, N.J., said the transaction will more than double its presence in Bucks, Chester, Delaware, Montgomery and Philadelphia counties. Prime has 27 branches and $1 billion in assets.
Once the deal is completed, the company said, it will be the fifth-largest bank in the 13 counties of eastern Pennsylvania, with more than 100 branches and $3.9 billion in assets.
Under terms of the deal, which requires shareholder approval, Prime holders will receive 0.675 Summit share for each share they own. That puts the value of Prime stock, based on Summit's Wednesday closing price of $39.375, at $26.58 a share, well above the $18 a share at which it closed Wednesday.
Summit (SUB) said Fort Washington, Pa.-based Prime (PBNK) could opt out of the deal if Summit's shares fall below $32.68 a share and are 17 percent below an index of selected banking companies.
Summit said it expects to complete the transaction during the third quarter of this year.