Colorado-based Legacy Bank to merge with InBankshares unit

Colorado-based Legacy Bank and InBankshares Corp entered into a definitive merger agreement pursuant to which Legacy Bank will merge with and into InBankshares unit InBank in a stock-and-cash transaction.

Under the terms of the deal, InBankshares will issue 3,566,387 shares of its common stock and pay approximately $21.3 million in cash to Legacy Bank shareholders in the aggregate. The total consideration is valued at about $56.0 million, based on InBankshares' Nov. 29 closing common stock price of $9.75 per share. The actual value of the consideration to be paid will change due to fluctuations in the price of InBankshares common stock and is subject to certain potential adjustments as set forth in the merger agreement, according to a news release.

Prior to the closing of the transaction, Legacy Bank will distribute to its shareholders other real estate owned and other assets. The bank will also pay its shareholders a special cash dividend, the amount of which will depend on Legacy Bank's tangible common equity at the closing, net of certain seller-paid transaction expenses.

The Esgar family will hold a "significant" stake in InBankshares post-closing and will receive a seat on the InBankshares and InBank boards. Legacy Bank Chairman, President and CEO Dave Esgar will continue to work with the combined organization to help ensure a smooth and successful transition. Andrew Trainor, regional president of Legacy Bank, will join the InBank executive team.

The merger is expected to close early in the second quarter of 2022, with a systems conversion planned for the late third quarter of 2022.

The combined bank will have about $1.2 billion in total assets, according to the news release.

InBankshares expects the transaction to qualify as a tax-free exchange with respect to the stock consideration received by Legacy Bank shareholders. The company also anticipates the transaction will be over 50% accretive to its EPS within the first year of combined operations with a pro forma return on average assets approaching 1.0% and a tangible book value earnback of approximately 2.5 years.

Stephens Inc. was the financial adviser and Otteson Shapiro LLP acted as legal counsel to InBankshares on the transaction. Olsen Palmer LLC was the financial adviser and Lewis Roca Rothgerber Christie LLP acted as legal counsel to Legacy Bank.