In Ohio, Martins Ferry-based United Bancorp Inc. is acquiring Powhatan Point Community Bancshares Inc. in a cash-and-stock deal valued at approximately $129.10 per share, or $6.8 million in aggregate, based on the buyer's June 13 closing price of $13.05.
For each share held, Powhatan Point shareholders will receive 6.9233 United Bancorp common shares and $38.75 in cash.
The deal, which is subject to regulatory and Powhatan Point shareholder approvals, is expected to close in the fourth quarter. It will increase United Bancorp's presence in Belmont County, Ohio, and improve the company's pro forma deposit market share to 15.9%.
Upon completion, Powhatan Point unit First National Bank of Powhatan Point will merge with and into United Bancorp unit Unified Bank. First National Bank of Powhatan Point's main office will then become a full-service branch of Unified Bank.
As of March 31, Unified Bank had $486.6 million in assets. Meanwhile, Powhatan Point had about $59 million in assets, $7.9 million in loans, $53.6 million in deposits and $5.2 million in consolidated equity as of the same date. Powhatan Point also operates one branch in Belmont County, Ohio.
Including fully phased in cost savings of 21%, the deal is expected to be around 7% accretive to fully diluted EPS. The tangible book value per share dilution earnback will be around 2.2 years using the crossover method. United Bancorp is also planning to restructure Powhatan Point's investment portfolio, with an expected 1.05% yield improvement.
SNL also calculates the deal value to be 132.92% of common equity and tangible common equity and 24.50x earnings, on an aggregate basis. It is also 11.63% of assets and 12.75% of deposits. The tangible book premium-to-core deposits ratio is 3.35%.
For comparison, SNL valuations for bank and thrift targets in the Midwest region between June 14, 2017, and June 14, 2018, averaged 159.55% of book, 167.55% of tangible book and had a median of 20.50x last-12-months earnings, on an aggregate basis.
United Bancorp Inc., as a result of the deal, will expand in Belmont County, Ohio, by one branch to be ranked third with a 16.06% share of approximately $1.49 billion in total market deposits.
ProBank Austin acted as financial adviser to United Bancorp, with Craig Mancinotti as lead banker. Shumaker Loop & Kendrick LLP acted as legal adviser to the buyer. CAMELS Consulting Group and Dinsmore & Shohl LLP advised Powhatan Point.