trending Market Intelligence /marketintelligence/en/news-insights/trending/njSQQREfZwbnvDygF7Ylsg2 content esgSubNav
In This List

QCR Holdings buying Guaranty Bankshares in $44.2M deal


Banking Essentials Newsletter: 7th February Edition

Case Study

A Bank Outsources Data Gathering to Meet Basel III Regulations


Private Markets 360° | Episode 8: Powering the Global Private Markets (with Adam Kansler of S&P Global Market Intelligence)


Banks’ Response to Rising Rates & Liquidity Concerns

QCR Holdings buying Guaranty Bankshares in $44.2M deal

Moline, Ill.-based QCR Holdings Inc. will acquire all assets of Cedar Rapids, Iowa-based Guaranty Bankshares Ltd. in a 79%-stock-and-21%-cash deal valued at roughly $44.2 million.

The deal includes the acquisition of 100% of unit Guaranty Bank and Trust Co.'s common stock. Upon completion, Guaranty Bank will merge with and operate as branches of QCR Holdings unit Cedar Rapids Bank and Trust Co.

In a June 8 investor presentation, QCR Holdings estimated the deal value at 140% of tangible book and 24.0x last-12-months earnings. The deal is expected to be immediately accretive, with an internal rate of return in excess of 20%. QCR Holdings expects pretax expenses of $4.0 million, cost savings of roughly 30%, and EPS accretion for 2018 of 4% or more.

On an aggregate basis, SNL calculates the deal value to be 144.2% of book and tangible book and 27.4x last-12-months earnings. The price is 20.70% of deposits and 16.56% of assets, and the tangible book premium to core deposits ratio is 6.68%.

For comparison, SNL valuations for bank and thrift targets in the Midwest region between June 8, 2016, and June 8, 2017, averaged 144.13% of book and 146.97% of tangible book and had a median of 20.01x LTM earnings, on an aggregate basis.

Should the companies decide to terminate the deal, a termination fee of around $1 million to $1.3 million will be paid, depending on the cause of the termination.

The deal, which is subject to regulatory and shareholders approval, is expected to close late in the third quarter or early in the fourth quarter.

As of March 31, 2017, Guaranty Bank had $266.8 million in assets, total loans of $197.3 million and total deposits of $213.5 million. QCR Holdings had $3.38 billion in assets as of March 31, and its Cedar Rapids Bank unit had $931.3 million in assets.

Piper Jaffray & Co. served as financial adviser to QCR Holdings, with Barack Ferrazzano Kirschbaum serving as legal counsel. Sheshunoff & Co. was financial adviser to Guaranty Bankshares, while Hunton & Williams LLP was legal counsel.

To use S&P Global Market Intelligence's branch analytics tools to compare market overlap, click here. To use S&P Global Market Intelligence Maps to create custom maps, click here.

SNL is an offering of S&P Global Market Intelligence.

SNL Image