Farmers & Merchants Bancorp has agreed to acquire Perpetual Federal Savings Bank (PFSB) in a stock and cash deal.
Based in Ohio, PFSB has $391m in total assets, $326m in loans, $305m in deposits and $79m in tangible equity at the end March 2021.
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The acquisition is expected to expand F&M’s banking services into the Urbana, Columbus, Dayton, Springfield, Piqua, Tipp City, Troy and Sidney markets.
It would also support significant fill-in potential between Findlay and Urbana, the firm noted.
The two firms have also agreed on a plan of reorganisation.
Shareholders of PFSB can now opt to either receive 1.7766 shares of FMAO stock or $41.20 per share in cash for each share held in PFSB.
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By GlobalDataThis is subject to adjustment based upon 1,833,999 FMAO shares planned to be issued in the merger.
Based on FMAO’s closing share price of $24.22 on 3 May 2021, the acquisition’s implied aggregate value is estimated at $103.7m.
F&M president and CEO Lars Eller said: “This transaction is an excellent opportunity for PFSB to become part of a larger community banking organization that offers customers a wider range of financial services.
“F&M has created a successful acquisition platform and PFSB represents F&M’s fourth acquisition over the past two years of banking and complementary financial services companies.”
Upon completion of the deal, F&M will have total deposits of $2.129bn, total loans of $1.730bn, and total assets valued $2.513bn.
Perpetual Federal Savings Bank president and CEO Michael Melvin said: “F&M has a history of completing successful acquisitions and provides PFSB with the necessary resources to pursue compelling growth opportunities throughout our markets.”
F&M said its acquisition strategy and strong organic growth have resulted in 125% increase of total assets since 2018, on a pro forma basis.
