Under the terms of this latest deal, Alliance shareholders would receive either 0.44 shares of WashingtonFirst’s common stock or $5.30 in cash for each share of the existing stock they own.
The purchase price represents 86 percent of Alliance’s reported book value at the end of December and a premium of 19 percent above May 3’s closing price of the bank’s shares. Both boards have given the deal a thumbs up. It is expected to close in the fourth quarter subject to regulatory approval.
If the deal goes through, it would give WashingtonFirst six additional branches in Northern Virginia and $506 million in additional assets. All told, the bank would boast a total of $1.1 billion in assets and a network of 16 branches throughout the Washington area.
“We are thrilled to be able to add Alliance’s valuable Northern Virginia franchise to our growing footprint in the Washington metropolitan area,” said Shaza Andersen, chief executive of WashingtonFirst, in a release announcing the deal.
“The current management team at Alliance, led by Bill Doyle, has done a commendable job of restoring the bank to a sound condition, and we look forward to working with his team to carry our combined business to the next level.”
Alliance Chairman Don Fischer and two additional directors at the bank would join the board of WashingtonFirst upon the completion of the merger. It’s unclear whether Doyle would remain in any capacity as calls to both camps were not returned by press time.
Alliance has been on the market for well over a year. It seemed in July 2011 that the bank would be folded into Bethesda-based EagleBank, which put up $31.2 million, or $6.11 a share, to expand its turf in Northern Virginia.
But by the time the days grew cold in late November, so did the deal. EagleBank said irreconcilable differences caused it to call off the merger.
At the time EagleBank chief executive Ronald D. Paul said, “It feels like a divorce. We went through the therapy, and it just didn’t work.”
Neither side would discuss the particulars of the breakup, citing a confidentiality agreement. But they said the split was amicable, and there was no termination fee involved. Alliance, however, did incur $1.2 million in expenses related to the breakup, which contributed to its net loss of $6 million for 2011.