Moline, Ill.-based QCR Holdings is acquiring Springfield, Mo.-based Guaranty Federal Bancshares next year in a more than $150 million deal.
Guaranty Bank, the nearly $1.2 billion banking subsidiary of Guaranty Federal, will merge into the $850 million Springfield First Community Bank, QCR Holdings’ Springfield-based charter. The combined bank will operate under the Guaranty Bank name in Springfield and southwest Missouri markets once the deal is finalized, possibly in late March or early April. As of late September, the combined bank would have approximately $2 billion in total assets, $1.5 billion in total loans and $1.6 billion in total deposits. The combined bank would have $7.2 billion in assets, $5.4 billion in loans and $5.9 billion in deposits, ranking fourth in deposit market share in the Springfield market.
“Springfield and neighboring southwest Missouri markets make up a vibrant region where strong relationships with our clients matter. Guaranty Bank strongly aligns with our culture and our dedication to client service,” said Larry Helling, QCR Holdings CEO. “Enhancing our market share in this region supports our strategic goals and enables us to extend our high-performing and profitable niche business lines benefiting clients and shareholders alike.”
Guaranty Bank has 225 employees and 16 banking locations in Springfield, Joplin, Carthage, Ozark, Nixa and Neosho, Mo. The bank had approximately $1 billion in deposits as of Sept. 30. SFC Bank President and CEO Monte McNew will serve as CEO of the combined bank, and Guaranty Bank President and CEO Shaun Burke will serve as president. “We are delighted to be joining forces with Guaranty Bank to serve our clients and our communities,” McNew said. “This partnership positions us to become the preeminent bank in this market. We look forward to demonstrating the value of this merger to all of our stakeholders by showing how we’re better together.”
Offering shareholders more liquidity was one factor in opting to sell, said Todd A. Gipple, QCR Holdings president, CFO and chief operating officer.
“Our M&A strategy has always been about finding the right partners in the right markets that share our core values and business strategy,” Gipple said. “The blending of talent and expertise from both SFC Bank and Guaranty Bank, and the increased product and service capabilities of the combined bank, will result in continued strong growth in Springfield and surrounding communities. We are very excited about the opportunities this merger provides.”
To Burke, “joining the QCR Holdings Family and the team at SFC Bank is an exciting opportunity for us to expand our product and service offerings while continuing our track record of delivering exceptional client service.”
The acquisition had been on the radar of QCR Holdings since its 2018 merger with Springfield Bancshares, Inc. “It will continue and probably increase the opportunity for us to continue our growth trajectory that we have been on,” Helling said.
To Helling, the merger, by blending talent and expertise, will serve clients, improve shareholder returns and prove beneficial in other ways. Guaranty has a $1 billion portfolio. Helling noted QCR Holdings remains open to future M&As.
Excluding one-time merger-related expenses, QCR Holdings’ earnings per share accretion is expected at approximately 13 percent in 2023, with 2.75-year tangible book value per share dilution earnback period. Guaranty stockholders will have the right to receive for each share of Guaranty common stock owned $30.50 in cash, 0.58775 shares of QCR Holdings common stock, or mixed consideration of $6.10 in cash and 0.4702 shares of QCR Holdings common stock, with total consideration of approximately 80 percent stock and 20 percent cash.
Piper Sandler & Co. served as financial advisor and provided a fairness option to QCR Holdings. Barack Ferrazzano Kirschbaum & Nagelberg LLP served as legal counsel. Keefe, Bruyette & Woods, Inc., served as financial advisor and provided a fairness option to Guaranty Bancshares. Sidley Austin LLP served as legal counsel.