ARCHBOLD, Ohio, May 04, 2021 (GLOBE NEWSWIRE) — Farmers & Merchants Bancorp, the holding company for Farmers & Merchants State Bank, announced today that they have signed an agreement and plan of reorganization and merger whereby F&M will acquire Perpetual Federal Savings Bank, in a stock and cash transaction. PFSB operates one full-service office in Urbana, Ohio. At March 31, 2021, PFSB reported $391 million in total assets, $326 million in loans, $305 million in deposits and $79 million in tangible equity.
Subject to the terms of the merger agreement, which has been approved by the Board of Directors of each company, PFSB shareholders will elect to receive either 1.7766 shares of FMAO stock or $41.20 per share in cash for each PFSB share owned, subject to adjustment based upon 1,833,999 shares of FMAO to be issued in the merger. At March 31, 2021, PFSB reported 2,470,032 shares of common stock outstanding. Based on FMAO’s closing share price as of May 3, 2021 of $24.22, the implied aggregate acquisition value equals $103.7 million.
PFSB expands F&M’s community banking franchise into the compelling Urbana, Columbus, Dayton, Springfield, Piqua, Tipp City, Troy and Sidney markets and supports significant fill-in potential between Findlay and Urbana. After the PFSB transaction, and including the recently closed acquisition of Ossian Financial Services, Inc., F&M will operate 19 offices, a drive-up facility and an LPO in Ohio, 12 offices and an LPO in Indiana, and an LPO in Michigan with total deposits of $2.129 billion, total loans of $1.730 billion, and total assets of $2.513 billion on a pro forma basis at March 31, 2021.
Lars Eller, President and CEO of F&M, stated, “The combination of PFSB and F&M creates immediate value for our shareholders, customers, and communities and I am excited to expand F&M’s community-oriented banking services to the Urbana, Columbus, Dayton, Springfield, Piqua, Tipp City, Troy and Sidney markets. This transaction is an excellent opportunity for PFSB to become part of a larger community banking organization that offers customers a wider range of financial services.”
“F&M has created a successful acquisition platform and PFSB represents F&M’s fourth acquisition over the past two years of banking and complementary financial services companies. F&M’s acquisition strategy, combined with a history of strong organic growth, have contributed to a 125% increase in total assets on a pro forma basis since 2018. On behalf of everyone at F&M, I am pleased to welcome PFSB’s customers and employees to the F&M family,” concluded Mr. Eller.
Michael R. Melvin, President and CEO of Perpetual Federal Savings Bank, stated, “With a shared community-oriented culture, F&M’s scale, diversity, and expertise enhances our service offerings. F&M has a history of completing successful acquisitions and provides PFSB with the necessary resources to pursue compelling growth opportunities throughout our markets. We are excited to join F&M.”
Excluding one-time transaction costs, F&M expects the transaction to be approximately 10.0% and 14.5% accretive to first- and second-year diluted earnings per share, respectively. Tangible book value per share will be diluted approximately 6.6% at closing including the impact of an estimated $5.0 million of combined pre-tax transaction costs. The tangible book value dilution is expected to be recovered in 3.9 years using the crossover method.
F&M is being advised by ProBank Austin and Shumaker, Loop & Kendrick, LLP. PFSB is being advised by Keefe Bruyette & Woods, A Stifel Company and Vorys, Sater, Seymour and Pease LLP.
About Farmers & Merchants State Bank:
The Farmers & Merchants State Bank is a local independent community bank that has been serving Northwest Ohio and Northeast Indiana since 1897. The Farmers & Merchants State Bank provides commercial banking, retail banking and other financial services. Our locations are in Fulton, Defiance, Hancock, Henry, Lucas, Williams, and Wood counties in Northwest Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, and Steuben counties.
About Perpetual Federal Savings Bank:
Perpetual Federal Savings Bank of Urbana (PFSB) provides financial products and services through its one office location in Urbana, Ohio. The majority of PSFB’s income is derived from mortgage loans secured by one- to four-family residential property, commercial and multi-family real estate loans and, to a lesser extent, construction or development loans, consumer loans, commercial business loans, as well as making other investments. PFSB accepts demand, savings, and time deposits.
| Farmers & Merchants Contacts | |
| Company Contact: | Investor and Media Contact: |
| Lars B. Eller | Andrew M. Berger |
| President and Chief Executive Officer | Managing Director |
| Farmers & Merchants Bancorp, Inc. | SM Berger & Company, Inc. |
| (419) 446-2501 | (216) 464-6400 |
| leller@fm.bank | andrew@smberger.com |
| Perpetual Federal Savings Bank Contacts | |
| Michael R. Melvin | |
| President and Chief Executive Officer | |
| Perpetual Federal Savings Bank | |
| (937) 653-1700 | |
| mike.melvin@pfsb-urbana.com |