CrossFirst to enter Colorado, NM with F&S acquisition

CrossFirst Bankshares in Leawood, Kan., will enter Colorado and New Mexico as part of an agreement to buy Farmers & Stockmens Bank in Clayton, N.M.

The $5.6 billion-asset CrossFirst said in a press release Tuesday that it will pay $75 million in cash to Central Bancorp for the $567 million-asset F&S Bank. The deal, which is expected to close in the second half of this year, priced F&S Bank at 163% of its tangible book value. 

Central will keep its wealth management units. 

CrossFirst plans to incorporate F&S Bank’s Small Business Administration and agricultural lending capabilities into its current platform. 

“This transaction represents an exciting milestone for our company, allowing us to enter new, dynamic markets, and expand our capabilities by partnering with an impressive team of bankers,” Mike Maddox, CrossFirst’s president and CEO, said in the release. 

Scott Page, F&S Bank’s CEO, will join CrossFirst. 

The transaction is expected to be 11.7%, accretive to CrossFirst’s 2023 earnings per share, assuming fully phased-in cost savings. It should take less than three years for the company to earn back an estimated 5.8% dilution to its tangible book value. 

CrossFirst plans to cut about 20% of F&S Bank’s annual noninterest expenses. The company expects to incur $3 million of merger-related charges.

CrossFirst was advised by Keefe, Bruyette & Woods and Stinson. Central was advised by Piper Sandler and Otteson Shapiro.