Kansas-based Community Bancorp, unit to acquire Quarry City Savings and Loan

Chanute, Kan.-based Community Bancorp Inc. and unit Community National Bank & Trust reached a definitive agreement to acquire Warrensburg, Mo.-based Quarry City Savings and Loan Association.

The all-cash aggregate merger consideration for the deal, after accounting for all of the estimated transaction costs on a tax-effected basis, is estimated to be approximately $10.4 million, subject to further adjustment as provided in the definitive agreement.

Quarry City Savings and Loan Association estimates that, without any further adjustments, this will result in a cash consideration of about $25.42 per share to the current holders of the savings association's common stock. However, shareholders should not assume they will receive $25.42 per share upon completion of the deal because the estimated per-share consideration may be subject to "significant adjustment" based on various factors, according to a news release.

The deal is expected to close in the third quarter. The proposed transaction will merge Quarry City Savings and Loan Association with and into Community National Bank & Trust, with the latter surviving the merger.

Quarry City Savings and Loan Association reported total assets of $71.3 million as of Dec. 31, 2021, according to the news release. Community National Bank & Trust had $1.91 billion in total assets as of the same date, according to S&P Global Market Intelligence data.

At announcement, Market Intelligence calculates the deal value to be 108.22% of common equity and tangible common equity, 16.95% of deposits and 14.53% of assets. The tangible book premium-to-core deposits ratio is 1.60%.

Market Intelligence valuations for bank and thrift targets in the Midwest region between Mar. 22, 2021, and Mar. 22, 2022, averaged 141.94% of book and 147.63% of tangible book and had a median of 18.19x last-12-months earnings, on an aggregate basis, and averaged 138.89% of book and 149.65% of tangible book and had a median of 15.95x last-12-months earnings, on a per-share basis.

The deal has a one-day premium of 58.97% and a one-month premium of 58.88%.

Community Bancorp Inc. will enter Johnson County, Mo., with one branch to be ranked sixth with a 6.66% share of approximately $933.93 million in total market deposits.

Quarry City Savings and Loan Association is being advised by The Capital Corp. as financial adviser and Luse Gorman PC as legal counsel. Community National Bank & Trust is being advised by Minter & Pollak LC.

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