Banking & Finance

Farmers Banc Corp. to Acquire Tri-State First Banc

CANFIELD, Ohio — Farmers National Banc Corp, holding company of Farmers National Bank of Canfield, today announced it has agreed to buy Tri-State First Banc Inc., holding company for 1st National Community Bank of East Liverpool, for $14.2 million

If approved by shareholders of both companies and regulators, the transaction would close in the fourth quarter, officials said. Branches of 1st National would become branches of Farmers Bank, which will then have 38 banking offices and about $1.8 billion in assets.

The purchase agreement comes less than one week after Farmers national Banc Corp. completed the $74 million merger of National Bancshares Corp., holding company for First National Bank of Orrville. That transaction was announced Jan. 27 (READ STORY)

Said Kevin J. Helmick, president and CEO of Farmers, in a prepared statement, “The transaction will increase Farmers’ market share by 65% in Columbiana County and we will now have the second-highest deposit base in the county. In addition, this transaction will serve as an entrance into the Pennsylvania market for Farmers.”

Tri-State shareholders would receive $14.20 per share in cash or 1.747 of Farmers’ common shares, subject to an overall limitation of 75% of their shares exchanged for Farmers shares and 25% for cash, according to the announcement. Based on Farmers’ closing share price of $8.20 on Tuesay, the transaction is valued at approximately $14.2 million. The merger is expected to qualify as a tax-free reorganization for those shareholders who elect to receive Farmers’ shares.

As of March 31, Tri-State had total assets of $139.5 million, which included gross loans of $67.0 million. Its deposits were $122.9 million. For the 12 months ended March 31, Tri-State’s return on average assets and return on average equity were 0.71% and 8.78%, respectively.

“Tri-State has an excellent low-cost deposit base with over $54 million in non-interest bearing deposits as of March 31,” Helmick noted, “and an overall cost of funds of 0.22% for the three months ended March 31. This transaction helps Farmers continue to grow its market share, balance sheet and earnings.”

Farmers expects the transaction to be accretive to earnings per share for the first full year of operation, excluding one-time merger costs, and expects any tangible book value dilution created in the transaction to be earned back in approximately 2.3 years (using the cross-over method.) Following completion of the transaction, Farmers National Bank expects it will exceed “well-capitalized” thresholds under all regulatory definitions, the company said.

“By combining with Farmers, we are able to deliver value to our shareholders and partner with a company that embodies the community bank culture,” said Stephen R. Sant, president and CEO of Tri-State. “We are excited to partner with a growing organization that delivers value to its shareholders, employees, customers and communities.”

Raymond James & Associates, Inc. is the financial adviser to Farmers and Vorys, Sater, Seymour and Pease LLP is legal counsel to Farmers on the transaction. Boenning & Scattergood Inc. is the financial adviser to Tri-State and Buchanan Ingersoll & Rooney PC is its legal counsel on the transaction.

SOURCE: Farmers National Banc Corp.

 

Published by The Business Journal, Youngstown, Ohio.