The $5.8 billion-asset
First Mid said in a press release Thursday that it will pay $15.2 million in
cash and stock for the $697 million-asset Delta. The deal, which is expected to close
in the fourth quarter, priced Delta at 141% of its tangible book value.
Delta has five branches,
$484 million of loans and $546 million of deposits.
First Mid also agreed to
buy $225 million of loans and $280 million of deposits from an unnamed financial
institution. The acquisition, which will include four commercial lenders, is
expected to close in September.
First Mid said it
expected the deals to be 14% accretive to its 2022 earnings per share,
excluding merger-related charges. It should take less than two years for First
Mid to earn back an estimated 3% dilution to its tangible book value.
First Mid said it plans
to cut about a third of Delta's annual noninterest expense. The company expects to incur $5 million of merger-related charges.
“The geographic
synergies and financial metrics of these transactions are compelling and
consistent with our strategy of deepening our presence in the attractive St.
Louis market,” Joe Dively, First Mid’s chairman and CEO, said in the release.
“The proposed loan and
deposit acquisition is similar to the one we completed in April of last year,”
Dively added. “We reviewed nearly all the loans and have extensive knowledge
with both the borrowers and the commercial lenders. I anticipate this being a
smooth transition.”
Stephens and Schiff
Hardin advised First Mid on the Delta transaction. Piper Sandler and Armstrong
Teasdale advised Delta.
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