The $3.3 billion-asset Farmers National said in a press release Wednesday that it will pay $124 million in cash and stock for the $792 million-asset Cortland. The deal, which is expected to close in the fourth quarter, priced Cortland at 153% of its tangible book value.
Cortland has 13 branches, $519 million of loans and $680 million of deposits.
James Gasior, Cortland's president and CEO, will join Farmers National as a senior executive vice president and corporate development officer. Two Cortland directors will join Farmers National's board.
"We have known and competed with Cortland for a long time," Kevin Helmick, Farmers National's president and CEO, said in the release.
"This acquisition will further solidify our market share in Trumbull and Mahoning counties as well as expand our presence in the greater Cleveland area furthering our strategy of building local scale throughout northeast Ohio,” Helmick added.
Farmers National said the deal should be 13.5% accretive to earnings per share when fully phased in. The company said it should take a little more than three years to earn back any dilution to its tangible book value.
Farmers National plans to cut about 39% of Cortland's annual noninterest expenses. It expects to incur $11.1 million of merger-related charges.
"The financials look solid, and while we have some questions as to how Cortland will contribute to Farmers National's long-term growth rate, it solidifies the bank's top-quartile profitability profile at a time when most peers are seeing compression," Michael Perito, an analyst at Keefe, Bruyette & Woods, wrote in a note to clients.
Raymond James and Vorys, Sater, Seymour & Pease advised Farmers National. Piper Sandler and Grady & Associates advised Cortland.
No comments:
Post a Comment