Community Bank System said it will try to raise $45.6 million in new capital to support its pending purchase of 18 Northern New York offices from RBS Citizens Financial Group.
The DeWitt-based banking company, which operates 33 branches and Nottingham Advisors in Western New York, said in a filing with the Securities and Exchange Commission that it will offer 2.2 million shares of common stock to the public, at $20.75 per share.
It also granted the underwriters, Janney Montgomery Scott LLC, an option to buy another 330,000 shares for any over-allotments. Without that, the bank will have 32.3 million shares of common stock outstanding after the offering.
The offering is expected to close on or about Oct. 7. After underwriting discounts, commissions and expenses, the net proceeds are expected to total about $42.9 million.
Community Bank has $4.7 billion in assets and operates 140 branches across Upstate New York and in northeastern Pennsylvania. In Pennsylvania, it operates as First Liberty Bank & Trust.
The company agreed on June 24 to pay $75.6 million to buy 18 RBS Citizens branches and 16 ATMs in Clinton, Franklin, Essex, Lewis, Hamilton, Warren and Washington counties. The deal includes $606 million in deposits and $116 million in commercial and consumer loans, plus cash, property, furniture and equipment valued at $12 million.
In their filing with the SEC, bank officials called the transaction a "unique opportunity" to grow its branch network, expand services into new markets and increase business significantly without a big increase in overhead. They described it as similar to buying a whole bank, without the normal costs.
The transaction gives Community Bank, which focuses on small towns and rural markets, the No. 1 market share in Plattsburgh and surrounding Clinton County, with 22.8 percent, and boosts its total market share in the region to 10.4 percent from 6.4 percent.
The deal is expected to close in the fourth quarter but is not dependent on the success of the stock offering.