In Topeka, Kan., Capitol Federal Financial Inc. is acquiring Capital City Bancshares Inc.
On an aggregate basis, the deal value represents 142.6% of book and tangible book. The deal value is 26.3x earnings, 8.65% of assets, 10.04% of deposits and has a tangible book premium-to-core deposits ratio of 4.13%. SNL valuations for bank and thrift targets in the Midwest region between April 30, 2017, and April 30, 2018, averaged 163.05% of book, 168.82% of tangible book and had a median of 20.33x last-12-months earnings, on an aggregate basis.
Capitol Federal will expand in Douglas County, Kan., by two branches to be ranked first with a 21.97% share of approximately $2.27 billion in total market deposits. It will expand in Johnson County, Kan., by one branch to be ranked first with a 12.36% share of approximately $19.81 billion in total market deposits, and in Shawnee County, Kan., by seven branches to be ranked first with a 40.15% share of approximately $4.46 billion in total market deposits.
Capital City Bank, which had total assets of $438.3 million as of March 31, has agreed to merge into Capitol Federal Savings Bank which had assets of $9.0 billion as of end-2017, upon merger completion. Excluding purchase accounting, the combined company would have pro forma total assets of $9.5 billion, gross loans of $7.5 billion and deposits of $5.7 billion, as of March 31.
Remaining under $10 billion in assets will allow Capitol Federal to continue its current dividend policy of paying 100% of earnings, while providing a positive upside, Capitol Federal Chairman and President John Dicus said.
Capitol Federal posted fiscal second-quarter net income available to common shareholders of $23.3 million, or 17 cents per share. This was lower than the $31.8 million, or 24 cents per share, recorded in the quarter ended Dec. 31, 2017.
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