In Indiana, Covington-based Piper Holdings Inc. has agreed to acquire Brookston-based Farmers State Bank for approximately $9.43 million in an all-cash transaction.
Upon deal completion, Farmers State Bank will merge into Fountain Trust Co.
According to a press release, the deal consideration represents 173% of Farmers' tangible book value, adjusted for the after-tax costs of specified employee retention bonuses and other costs, contract termination fees, and professional transaction costs as described in the merger agreement.
On an aggregate basis, SNL calculates the deal value to be 155.6% of book and tangible book. The price is 15.31% of deposits and 13.14% of assets, and the tangible book premium to core deposits ratio is 6.21%.
For comparison, SNL valuations for bank and thrift targets in the Midwest region between April 4, 2016, and April 4, 2017, averaged 141.39% of book, 143.74% of tangible book and had a median of 18.22x last-12-months earnings, on an aggregate basis.
The combined entity will have approximately $364 million in assets, $228 million in loans and $310 million in deposits.
Farmers, with approximately $72 million in total assets as of Dec. 31, 2016, is headquartered in Brookston, Ind. It has full-service branches in Brookston, Battle Ground and Lafayette.
Fountain Trust, with total assets of approximately $295 million, has 11 branches in Covington, Attica, Crawfordsville, Darlington, Kingman, Lafayette, Mellott, Rockville, Veedersburg and Waynetown.
Based on data collected by SNL, Piper Holdings Inc. will expand in Tippecanoe County, Ind., by two branches to be ranked No. 11 with a 1.02% share of approximately $2.44 billion in total market deposits and will enter White County, Ind., with one branch to be ranked fifth with a 9.29% share of approximately $478.40 million in total market deposits.
Floyd Garrott, chairman of Farmers, has decided to retire. Fountain Trust plans to retain Farmers execs Dani Thomas and Melissa Summers.
The transaction, subject to regulatory and Farmers shareholders approval, is expected to close in the third quarter.
Renninger & Associates LLC is serving as financial advisor to Farmers, and SmithAmundsen LLC is serving as legal counsel. Performance Trust Capital Partners LLC is serving as financial advisor to Fountain Trust, and Barnes & Thornburg LLP is serving as legal counsel.
SNL is an offering of S&P Global Market Intelligence.