Farmers & Merchants Bancorp, Inc., Archbold, Ohio, signed a deal to acquire Limberlost Bancshares, Inc., Geneva, Ind., in a cash and stock transaction worth about $89 million.
Limberlost’s subsidiary Bank of Geneva has approximately $287 million in assets, $257 million in loans, $212 million in deposits and $30.6 million in consolidated equity. It has six offices in Geneva, Berne, Monroe, Monroeville, Portland and Decatur, in northeast Indiana. The $1.1 billion F&M has 21 offices in Ohio and 4 offices in Indiana.
Following the merger’s close in fourth quarter 2018 or first quarter 2019, Andrew Briggs, chairman of Limberlost, will be appointed to the board of directors of F&M and Farmers & Merchants State Bank. Phil Lucas, currently executive vice president of Bank of Geneva, will join Farmers & Merchants State Bank as senior vice president.
“F&M is pleased to combine our two strong institutions, which have a shared vision and shared values,” said F&M President and CEO Paul Siebenmorgen. “This is an excellent opportunity for the Bank of Geneva to become part of a larger community banking organization that will allow us to offer customers in the communities served a wider range of financial services while still preserving the convenience of local decision makers throughout our office network.”
Excluding one-time transaction costs, F&M expects the transaction to be approximately 12.8 percent and 15.5percent accretive to first and second-year fully diluted earnings per share, respectively. Tangible book value per share will be diluted approximately 6.1 percent at closing including the impact of an estimated $5.5 million of combined pre-tax transaction costs. The tangible book value dilution is expected to be recovered in less than three years using the crossover method.
F&M is being advised by ProBank Austin and Shumaker, Loop & Kendrick, LLP. Limberlost is being advised by Renninger & Associates, LLC and SmithAmundsen LLC.