In Louisville, Ky., Stock Yards Bancorp Inc. will buy all of the common stock of King Bancorp Inc. in an all-cash deal valued at $28 million.
The deal is expected to close in the second quarter of 2019.
The transaction is expected to be about 5% accretive to Stock Yards Bancorp's earnings per share.
On an aggregate basis, SNL calculates that the deal value is 180.4% of book and tangible book, and it is 11.3x earnings. Also, it is 14.34% of assets, 22.21% of deposits and the tangible book premium-to-core deposits ratio is 15.01%.
SNL valuations for bank and thrift targets in the Midwest region between Dec. 19, 2017, and Dec. 19, 2018, averaged 156.76% of book, 163.27% of tangible book and had a median of 22.99x last-12-months earnings, on an aggregate basis.
Upon completion of the merger, the president and CEO of King Bancorp, James King III, will join Stock Yards Bancorp unit Stock Yards Bank & Trust Co. and assist in a smooth transition of King Bancorp unit King Southern Bank's customers.
He will also work in a role to promote customer service and business development, and join Stock Yards Bank & Trust's executive loan committee.
King Bancorp had approximately $195 million in assets, as of Sept. 30, according to the press release. According to SNL data, as of Sept. 30, Stock Yards had total assets of $3.32 billion.
Stock Yards Bancorp will expand in Jefferson County, Ky., by three branches to be ranked fifth with a 9.34% share of approximately $20.39 billion in total market deposits. It will enter Nelson County, Ky., with two branches to be ranked fourth with a 12.48% share of approximately $783.3 million in total market deposits.
Banks Street Partners LLC served as financial adviser and Stoll Keenon Ogden PLLC acted as legal counsel to Stock Yards. Sandler O'Neill & Partners LP served as financial adviser and Frost Brown Todd LLC acted as legal counsel to King Bancorp.