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Newly formed bank investors group to buy Kansas-based community bank

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Newly formed bank investors group to buy Kansas-based community bank

Community Bancshares of America, a newly formed group of community bank investors, agreed to acquire Valley Falls, Kan.-based Northeast Kansas Bancshares Inc.

Financial terms of the deal were not disclosed, and the transaction is expected to close in the fourth quarter. No personnel changes are anticipated as a result of the deal.

Bob Wray, a managing director at Northeast Kansas Bancshares' financial adviser, Capital Corp., told S&P Global Market Intelligence that several Community Bancshares of America's members will serve as board members of the bank, and they intend to retain existing management. None of the investors plans to work at the bank, he said.

S&P Global Market Intelligence valuations for bank and thrift targets in the Midwest region between Sept. 30, 2018, and Sept. 30, 2019, averaged 155.40% of book and 159.47% of tangible book and had a median of 16.73x last-12-months earnings, on an aggregate basis.

Northeast Kansas Bancshares had total assets of $36.9 million as of June 30, according to S&P Global Market Intelligence data. It operates three branches in Jefferson County, Kan., ranked fourth with 16.10% of approximately $204.7 million in total market deposits.

Hampton & Royce is the legal counsel to Northeast Kansas Bancshares. Community Bancshares of America did not employ an adviser.

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