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Century Next Financial in Louisiana buying Ark. community bank

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Century Next Financial in Louisiana buying Ark. community bank

Ruston, La.-based Century Next Financial Corp. is buying Crossett, Ark.-based Ashley Bancstock Co. in a deal valued at $12.8 million in aggregate, or $54.16 per share.

The merger consideration is based on the closing price of Century Next Financial's common stock May 15 at $30 per share. At closing, Ashley Bancstock's shareholders will receive 1.8052 shares of Century Next Financial common stock for each Ashley Bancstock share. The transaction is expected to close in the fourth quarter. In addition, Century Next Financial plans to declare a 10% stock dividend after the deal closes.

On an aggregate basis, the deal value is 117.4% of book and tangible book, and 6.0x earnings. It is also 8.17% of assets, 9.24% of deposits and the tangible book premium-to-core deposits ratio of 1.71%.

For comparison, SNL valuations for bank and thrift targets in the Southeast region between May 16, 2017, and May 16, 2018, averaged 153.19% of book, 161.85% of tangible book and had a median of 25.88x last-12-months earnings, on an aggregate basis.

Under the terms of the deal, First National Bank of Crossett, a unit of Ashley Bancstock, will merge into Century Next Financial's unit, Bank of Ruston. The pro forma bank will have seven offices and more than $450 million in assets.

Century Next Financial will enter Ashley County, Ark., with four branches to be ranked first with a 45.67% share of approximately $281.6 million in total market deposits.

The banks called the deal a "strategic merger" in a press release.

Sandler O'Neill & Partners LP acted as financial adviser to Century Next Financial in the deal, and Silver Freedman Taff & Tiernan LLP acted as the bank's legal adviser. Southard Financial LLC was financial adviser to Ashley Bancstock and Mitchell Williams Selig Gates & Woodyard PLLC acted as legal adviser.

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