Merge, or borrow?

Two Philadelphia-area banks have attracted tens of millions of dollars this week as part of opposite strategies by regional lenders to grow large enough to stay independent.

C&N Bank owner Citizens & Northern Corp., based up in Wellsboro, Pa., near the New York border, said Wednesday it has agreed to pay $77 million in cash and stock for Doylestown-based Covenant Financial Inc., the latest step in a rapid consolidation of Bucks County’s small banks.

C&N, with more than two dozen branches in towns in the north-central Pennsylvania natural gas, farming, and hunting country and neighboring New York, made the leap to faster-growing Bucks County in Philadelphia’s northern suburbs last year when it agreed to pay $43 million for Monument Bancorp, also based in Doylestown.

With $512 million in loans and other assets, and nearly $400 million in local deposits, according to federal banking records, the purchase of Covenant (formerly MileStone Bank), which has been profitable in recent years, will triple C&N’s presence in Bucks County.

Citizens & Northern agreed to pay $16.50 — in cash or its own stock — for each share of Covenant, or a total of $77.2 milllion.

C&N plans to limit the cash it lays out to one-quarter of the total, paying the rest in stock and leaving Covenant owners with about 13 percent of the combined company. C&N says that it is paying a price 18.3 times Covenant’s profits during the year ended Sept. 30.

The deal follows more recently on a Dec. 8 agreement by Covenant rival William Penn Bancorp Inc., of nearby Bristol Borough, to absorb two small local savings banks — Fidelity Savings & Loan Association of Bucks County, also based in Bristol, and Washington Savings Bank in nearby Northeast Philadelphia.

With interest rates near record lows and growing competition from online lenders, bankers say it’s tough to make money with less than $1 billion in loans and other assets. After a string of acquisitions and before adding Covenant, C&N has $1.6 billion in assets. C&N was advised on the deal by the investment bank Boenning & Scattergood, of Conshohocken.

Mergers aren’t the only route to banking prosperity: On Thursday, Meridian Corp., Malvern-based owner of Meridian Bank, said it raised $40 million. The bank sold 10-year notes, priced to yield 5.375 percent for five years, then switching to the Secured Overnight Financing Rate, plus 3.95 percent, reset quarterly. The Secured Overnight rate is replacing the scandal-plagued London Interbank Offered Rate (Libor) as a loan and bond benchmark.

Meridian plans to use the newly borrowed $40 million to pay down older debt and make more loans. The sale shows investors agree there is “tremendous opportunity” in Philadelphia-area development and lending, said Meridian chairman and chief executive Chris Annas in an interview.

Some of the money will go to fuel Meridian’s new small-business lending team, which focuses on loans that qualify for federal Small Business Administration-backed loans, in a group headed by Rocco Perate, who moved with his team to Meridian after leaving the former Beneficial Bank a year ago.

Meridian topped $1 billion in assets earlier this year, Annas said.

The New York investment bank Sandler O’Neill + Partners LP led the sale, and Philadelphia law firm Stradley Ronon Stevens & Young advised Meridian.