The $1.3 billion-asset Middlefield said in a press release
Thursday that it will pay $64.4 million in stock for the $437 million-asset
Liberty. The deal, which is expected to close in the fourth quarter, priced
Liberty at 115% of its tangible book value.
Liberty has six branches, $297 million of loans and $379 million
of deposits.
Liberty “complements our
growth in the central Ohio market, and expands our footprint to the compelling northwest
Ohio market,” James Heslop II, Middlefield’s president and CEO, said in the
release.
“We believe this is a
compelling transaction that generates meaningful earnings per share accretion,
has a minimal tangible book value dilution and manageable earn-back period,”
Heslop added.
Ronald Zimmerly Jr.,
Liberty’s president and CEO, will become Middlefield’s president, assuming shareholders
approve amendments to the company’s regulations to split the roles of president
and CEO.
Three Liberty directors
will join Middlefield’s board. Those additions would be Zimmerly, Liberty
Chairman Mark Watkins and Spencer Cohn, a representative of Castle Creek
Capital, Liberty’s biggest shareholder.
Middlefield said it expects
the transaction to be 5.6% accretive to its 2023 earnings per share. It should
take three years to earn back an estimated 3% dilution to tangible book value.
Middlefield plans to cut
about a third of Liberty’s annual noninterest expenses. The company expects to
incur $7 million of merger-related charges.
Keefe, Bruyette &
Woods and Grady & Associates advised Middlefield. Raymond James and
Vorys, Sater, Seymour and Pease advised Liberty.
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