F.N.B. purchased the financial services company in an all-stock transaction for approximately $23.56 a share, which values OBA at approximately $94 million. The capital accretive transaction will provide FNB with an additional $390 million in total assets, $290 million in total deposits, $300 million in loans and six banking locations.
F.N.B. will have $1.2 billion in deposits and 31 locations in Maryland once it completes the deal for the Germantown-based company. F.N.B. expects the deal to close in the third quarter of 2014.
"This transaction presents an opportunity to add scale to our Maryland region and efficiently provide capital that can be leveraged to support our future growth," said F.N.B. President and CEO Vincent J. Delie, Jr. in a statement. "Since entering the Maryland market in 2013, we have built a solid presence and attracted strong regional leadership and an exceptional team of bankers.
"With this acquisition, we will continue to leverage our investments in the market and gain access to additional high-growth areas that will further strengthen our organic growth potential. We are pleased with our success in the Maryland market and partnering with OBA Financial will add to our momentum."
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TheStreet Ratings team rates OBA FINANCIAL SERVICES INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate OBA FINANCIAL SERVICES INC (OBAF) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 0.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for OBA FINANCIAL SERVICES INC is currently very high, coming in at 88.13%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.45% trails the industry average.
- Net operating cash flow has slightly increased to $0.67 million or 8.95% when compared to the same quarter last year. Despite an increase in cash flow of 8.95%, OBA FINANCIAL SERVICES INC is still growing at a significantly lower rate than the industry average of 409.51%.
- OBA FINANCIAL SERVICES INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, OBA FINANCIAL SERVICES INC increased its bottom line by earning $0.28 versus $0.07 in the prior year.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, OBA FINANCIAL SERVICES INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full analysis from the report here: OBAF Ratings Report