Banking & Finance

Farmers Bank to Buy Monitor Bank in Holmes County

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CANFIELD, Ohio – Farmers National Banc Corp., holding company of Farmers National Bank, announced this morning that it will pay $7.8 million to acquire Monitor Bancorp Inc., holding company of Monitor Bank in Big Prairie.

The sale is expected to close in the third quarter, a Farmers spokeswoman said, and requires that Monitor shareholders meet to approve the offer plus the usual regulatory approvals.

Monitor Bank has one office. The purchase would mark Farmers’ entry into Holmes County.

Pro forma, the assets of Monitor Bank, which would become an office of Farmers Bank, would increase the assets of Farmers National Banc Corp. to more than $2 billion, Kevin J. Helmick, president and CEO of both Farmers Bank and its parent, said.

The price Farmers pays “will be calculated based on Monitor’s consolidated tangible book value per share as of March 31,” Farmers and Monitor said in a prepared statement, “plus the after-tax proceeds of the anticipated sale of Monitor’s interest in Monitor Wealth Group.” Each Monitor shareholder will be given the choice of cash or common shares of Farmers with a limit in the aggregate of 85% Farmers shares and 15% cash.

Per share cash consideration will be equal to 1.25 time of Monitor’s of tangible book value at March 31. “The initial per share cash consideration will be equal to Monitor’s March 31 tangible book value multiplied by 1.25 and divided by $13.31, Farmers’ 20-day volume-weighted average closing stock price through Feb. 10,” the prepared statement said.

The exchange ratio, subject to adjustment before closing, is intended to assure that the aggregate value of the sale is not less than 115% nor more than 125% of the March tangible book value, that is, approximately $7.8 million.

As of Dec. 31, Monitor had assets of $43.3 million, which includes net loans of $22.3 million. It had deposits of $37.2 million. For full-year 2016, Monitor posted a return on average assets of 0.74% and a return on average equity of 5.44%.

Published by The Business Journal, Youngstown, Ohio.