Why is HV Bancorp (HVBC) stock surging today?

By - Rupam Roy


  • The HVBC stock soars over 29 per cent in the morning trading on Wednesday.
  • HV Bancorp announced merger of its business with another financial firm.
  • The merger deal would value around US$ 67.4 million in aggregate.

The HV Bancorp stocks (NASDAQ: HVBC) were among the top percentage gainers in the morning trading hours on Wednesday, October 19, as seen by the significant jump in its price.

The price of the HVBC stock jumped more than 29 per cent soon after the market opened on Wednesday, following its announcement to enter into a merger agreement.

Now, as we know that merger agreement news might have helped the recent gains in the HVBC stock, let's explore the agreement deal in detail.

Why is it rising?

HV Bancorp is a holding firm for the community bank Huntingdon Valley Bank which provides consumer and commercial banking services to its clients.

The financial firm jointly announced with Citizens Financial Services, Inc. (NASDAQ: CZFS) on Wednesday, October 19, that they have entered into a definitive agreement through which HVBC Bancorp will merge "with and into" Citizens Financial Services, Inc.

According to the terms of the agreement mentioned in the release, the HVBC stockholders would be allowed to choose either to receive US$ 30.5 in cash for each share of HVBC common stock or 0.400 shares of CZFS common stock. The aggregate value of the deal is US$ 67.4 million.

However, the rights of the shareholders would depend on the proration method whereby 80 per cent of the shares of HVBC common stock would be exchanged for CZFS common stock, and the remaining part would be exchanged for cash.

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Bottom line:

The price of the HVBC stock jumped 29.10 per cent at 9:45 am ET on October 19 to trade at US$ 25.8837. Its trading volume was around 45,340 on Wednesday, a day after its stock closed at US$ 19.99.

The investors might have lauded the announcement, sending the HVBC shares higher, while the CZFS stock fell 4.64 per cent at 9:53 am ET to trade at US$ 67.00.

Meanwhile, as of June 30 this year, the company said that HV Bancorp had around US$ 570.6 million in assets, US$ 388.3 million in net loans, and US$ 481.5 million in deposits. Considering the financial metrics as of June 30, the combined entity is anticipated to have more than US$ 2.78 billion in assets, US$ 1.96 billion in gross loans, and US$ 2.36 billion in deposits after the deal's completion.