Philadelphia, Miss.-based Citizens Holding Co. agreed to acquire Biloxi, Miss.-based Charter Bank in a deal valued at $20.0 million.
Charter Bank shareholders will receive 0.39417 of a Citizens common share and $3.615 in cash for each common share they own. Based on Citizens' May 20 closing price of $20.90 per share, the deal carries a per-share value of $11.85 for Charter Bank shareholders.
As part of the deal, a Charter Bank director will be appointed to Citizens' board. Charter Bank CEO Gregory Cronin will serve in a leadership role at Citizens.
The deal is expected to close in the fourth quarter. Charter Bank will pay an $800,000 termination fee to Citizens under certain conditions if the deal does not go through.
On an aggregate basis, S&P Global Market Intelligence calculates that the deal value is 139.51% of common equity and tangible common equity and 62.5x last-12-months earnings. It is also 12.46% of assets, 14.92% of deposits, and the tangible book premium-to-core deposits ratio is 6.40%.
S&P Global Market Intelligence valuations for bank and thrift targets in the Southeast region between May 21, 2018, and May 21, 2019, averaged 167.52% of book, 178.46% of tangible book and had a median of 21.38x LTM earnings on an aggregate basis.
Citizens Holding Co. will expand in Jackson County, Miss., by two branches to be ranked seventh with a 4.49% share of approximately $1.73 billion in total market deposits and will expand in Harrison County, Miss., by two branches to be ranked ninth with a 1.65% share of approximately $3.33 billion in total market deposits.
Citizens, which is the parent of Citizens Bank of Philadelphia Mississippi, has total assets of $1.06 billion, and Charter Bank has total assets of $160.5 million, both as of March 31, according to S&P Global Market Intelligence data. The combined company will have roughly $1.2 billion in assets, $989 million in deposits and $569 million in gross loans.
Charter operates four bank branches in Harrison and Jackson counties in Mississippi.
Keefe Bruyette & Woods Inc. served as Citizens' financial adviser, and Baker Donelson Bearman Caldwell & Berkowitz PC served as its legal counsel. FIG Partners LLC served as Charter Bank's financial adviser, while Butler Snow LLP served as its legal counsel.