Seacoast Financial Services to acquire Abington Bancorp for 2.35 times revenue

Weekly Corporate Growth Report, Oct 27, 2003

The Deal: Seacoast Financial Services Corporation has agreed to purchase Abington Bancorp Inc. in a cash and stock deal valued at $139.5 million. Shareholders of Abington Bancorp will be entitled to receive $34 in cash, 1.4468 common shares of Seacoast, or a combination of the two in exchange for each share of Abington. Under the terms of the agreement, 75 percent of the Abington shares are to be exchanged for Seacoast stock. The deal still requires regulatory and shareholder approval. The transaction carries a $6 million breakup fee. The deal is expected to close either late in the first quarter or early in the second quarter of 2004.

Discussion: Abington Bancorp is the holding company for Abington Savings Bank. The bank operates about 20 branches and loan production offices in eastern and southeastern Massachusetts. Residential mortgages make up about half of the bank's loan portfolio.

Seacoast Financial Services is the holding company for Compass Bank for Savings and Nantucket Bank. The banks operate about 50 branches in southeastern Massachusetts. The banks focus primarily on individuals and local businesses. One- to four-family mortgages make up about half of Seacoast Financial's loan portfolio; indirect auto loans comprise nearly a quarter.

Abington will be merged with into Compass Bank, Seacoast's main banking unit. Seacoast expects the acquisition to increase its customer base and revenue.