Eagle Bancorp Montana Inc., the holding company of Opportunity Bank of Montana, agreed to acquire Western Holding Co. of Wolf Point and its subsidiary, Western Bank of Wolf Point, in a 50% cash and 50% stock deal.
With the acquisition of Western's $100 million in assets, Opportunity Bank is expected to have about $1.10 billion in assets and will add $77 million in deposits and $41 million in gross loans, based on data as of June 30.
On an aggregate basis, S&P Global Market Intelligence calculates that the deal value is 119.1% of common equity and of tangible common equity and 16.1x earnings. It is also 13.44% of assets, 17.40% of deposits, and the tangible book premium-to-core deposits ratio is 3.48%.
S&P Global Market Intelligence valuations for bank and thrift targets in the West region between Aug. 8, 2018, and Aug. 8, 2019, averaged 181.89% of book and 184.68% of tangible book and had a median of 17.04x last-12-months earnings, on an aggregate basis.
Eagle will enter Roosevelt County, Mont., with one branch to be ranked second with a 31.59% share of approximately $254.01 million in total market deposits.
Upon completion of the transaction, Opportunity Bank will have 22 retail branches in Montana.
Duane Kurokawa, president of Western Holding, will lead new branch efforts in northeastern Montana.
Under the agreement, shareholders of Western Holding will receive an aggregate 395,859 shares of Eagle common stock and $6.5 million in cash, for a total transaction value of about $13.0 million.
The deal is expected to close in the fourth quarter.
Eagle was represented by Nixon Peabody LLP and Panoramic Capital Advisors Inc., while Western Holding was represented by Ballard Spahr LLP and Vining Sparks IBG LP.