The $4.2 billion-asset Equity said in a press release Monday that
it will pay $73.6 million in stock for the parent of the $779 million-asset
American State Bank. About $6.6 million of American State preferred stock will
be redeemed when the deal closes.
The deal, which is expected to close in early October, priced
American State at 111% of its tangible book value.
American State “is an excellent community bank, and its leadership
and customer bases share a like mind with ours, valuing customized personal
service, and entrepreneurial spirit,” Brad Elliott, Equity’s chairman and CEO,
said in the release.
“Kansas is home to numerous, thriving communities with customers
who desire a community banking approach, and our institutions match up well in
terms of mindset and geographic fit,” Elliott added.
Doug Thurman, American State’s president and CEO, and the
bank’s leaders will remain at Equity. Lee Borck, American State’s chairman,
will join Equity’s board.
The deal would be Equity’s 10th bank acquisition since its 2015
initial public offering.
The transaction is expected to be 15.9% accretive to Equity’s 2022
earnings per share, excluding merger-related expenses. It should take less than
three years for Equity to earn back an expected 3.7% dilution to its tangible
book value.
Equity plans to cut about 34% of American State’s annual operating
expenses, or roughly $5.8 million. The company said it expects to incur $11.2
million of merger-related expenses.
Equity was advised by Stephens and Norton Rose Fulbright US. American
State was advised by D.A. Davidson and Stinson.
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