Moline, Ill.-based QCR Holdings Inc. agreed to acquire Missouri-based Springfield Bancshares Inc. in a cash-and-stock deal valued at approximately $86.7 million, or $15.33 per share, based on the April 16 closing price of QCR's common stock.
Springfield Bancshares stockholders will receive 0.3060 QCR common share and $1.50 in cash for each share held.
SNL calculates the deal value to be 183.8% of book and tangible book and 17.4x earnings, on an aggregate basis. It is also 14.98% of assets and 18.90% of deposits, and carries a premium to tangible book that is 13.57% of core deposits.
For comparison, SNL valuations for bank and thrift targets in the Midwest between April 17, 2017, and April 17, 2018, averaged 162.43% of book, 168.67% of tangible book and had a median of 20.58x last-12-months earnings, on an aggregate basis.
QCR has four bank charters — Bettendorf, Iowa-based Quad City Bank and Trust Co.; Iowa-based Cedar Rapids Bank and Trust Co.; Illinois-based Rockford Bank and Trust Co.; and Ankeny, Iowa-based Community State Bank. Springfield First Community Bank, on the other hand, operates one banking location. As of March 31, it had more than $560 million in assets and $445 million in deposits. QCR had approximately $3.98 billion in assets as of Dec. 31, 2017.
Through the acquisition, QCR will enter Greene County, Mo., with one branch, where it will rank sixth with a 5.53% share of approximately $7.65 billion in total market deposits. The deal is expected to close in the third quarter, pending regulatory approvals as well as approval by Springfield Bancshares' stockholders.
QCR intends to continue to operate Springfield First Community Bank post-deal, retaining the bank's charter and brand within Springfield. A member of Springfield's board will be added to the acquirer's board.
Excluding one-time merger-related expenses of $7.5 million, the buyer expects the transaction to be approximately 8% accretive to 2019 EPS, the first full year of combined operations. QCR also expects to incur tangible book value-per-share dilution of approximately 4% upon deal closing, with an earnback period of approximately three years.
Keefe Bruyette & Woods Inc. served as financial adviser to QCR and Barack Ferrazzano Kirschbaum & Nagelberg LLP served as legal counsel. For Springfield Bancshares, D.A. Davidson & Co. served as financial adviser and Stinson Leonard Street LLP served as legal counsel.
SNL is an offering of S&P Global Market Intelligence.