Paris, Ky.-based Blue Grass Federal Savings and Loan Association agreed to affiliate with Lakewood, Ohio-based First Mutual Holding Co.
The deal is expected to close in the fourth quarter, subject to the approval of regulatory agencies and Blue Grass FS&LA's voting members.
S&P Global Market Intelligence valuations for bank and thrift targets in the Midwest region between Aug. 16, 2018, and Aug. 16, 2019, averaged 153.51% of book and 155.42% of tangible book and had a median of 19.94x last-12-months earnings, on an aggregate basis.
The combined company will operate one branch in Bourbon County, Ky., to be ranked fourth with a 6.06% share of approximately $384.5 million in total market deposits.
Blue Grass FS&LA has $35 million in assets, according to a news release. Based on S&P Global Market Intelligence data, First Mutual Holding has total consolidated assets of $2.01 billion as of June 30.
ProBank Austin was First Mutual Holding's financial adviser in the transaction.

