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Mo. banks Enterprise Financial, Jefferson County Bancshares sign $130.6M deal

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Mo. banks Enterprise Financial, Jefferson County Bancshares sign $130.6M deal

In Missouri, Enterprise Financial Services Corp is acquiringJefferson County BancsharesInc. for approximately $130.6 million in cash and stock.

The consideration will be made up of 3.3 million Enterpriseshares and about $26.6 million in cash. The target's shareholderscan elect to exchange each Jefferson County share held for $85.39 or 2.75Enterprise common shares. The deal is expected to close in early 2017.

On anaggregate basis, SNL calculates the deal value to be 134.4% of book and 146.1%of tangible book, and 19.8x last-12-months earnings. The price is 17.09% of depositsand 14.11% of assets, and the tangible book premium to core deposits ratio is5.98%.

Forcomparison, SNL valuations for bank and thrift targets in the Midwest regionbetween Oct. 11, 2015, and Oct. 11, 2016, averaged 132.71% of book, 136.27% oftangible book and had a median of 18.22x LTM earnings, on an aggregatebasis.              

Enterprise expects to record merger-related charges of about$10 million pretax, but to reach cost-saves of $8.0 million, before taxes, whenthe acquisition is fully phased in. The deal will likely be accretive to EPS in2017, not counting the one-time charges, while 2018 EPS accretion is estimatedat 19 cents per share. Tangible book value could be diluted by 3.6%, but theearnback period is projected to be less than 3.25 years.

Enterprise and Jefferson County are the parent companies ofSt. Louis-based Enterprise Bank& Trust ($3.74 billion) and Hillsboro, Mo.-based ($927.7 million), respectively.

Datacompiled by SNL shows that Enterprise Financial Services Corp will expand inMissouri by 18 branches to be ranked eighth with a 1.87% share of approximately$165.98 billion in total market deposits.

Under the agreement, a Jefferson County director will benamed to Enterprise's board, and Jefferson County Chairman and CEO MichaelWalsh will join Enterprise Bank & Trust as director, executive vicepresident and chairman of the St. Louis region.

Sandler O'Neill & Partners LP and Reed Smith LLP actedas Enterprise's financial adviser and legal counsel, respectively. KeefeBruyette and Woods Inc. and Lewis Rice LLC served in those roles for JeffersonCounty Bancshares.

Click on the map below to access a larger version as aPDF. To use SNL's branch analytics tools to compare market overlap, click here.To use SNL Maps to create custom maps, click here.