Nicolet Bankshares in Green Bay, Wis., has agreed to buy County Bancorp in Manitowoc, Wis.
The $4.5 billion-asset Nicolet said in a press release Tuesday that it will pay $219 million in cash and stock for the $1.5 billion-asset parent of Investors Community Bank. The deal, which is expected to close in the fourth quarter, priced County at 138% of its tangible book value.
Nicolet said that, over time, it will bring a portion of County’s $842 million ag servicing book onto its own balance sheet.
Nicolet plans to cut about a third of County’s annual noninterest expenses. It expects to incur $19 million of merger-related expenses.
Tim Schneider, County’s president, will join Nicolet at a senior vice president and agriculture lending manager. A County director will join Nicolet’s board.
County on Monday disclosed improved credit metrics, reflecting a recovery in the agriculture sector.
Total nonperforming assets at County fell by $19 million, or 33%, since March 31, to $39 million. Classified assets have declined by 35% since the end of the first quarter.
The deal was “a surprise,” Brendan Nosal, an analyst at Piper Sandler, wrote in a note to clients.
“We did not view County as sellers,” Nosal added. “We viewed the company’s unique business mix [with ag loans making up 60% of the portfolio] as an unusual consideration for a buyer.”
Nosal said there are “ample opportunities” for Nicolet to use its excess liquidity to remix County’s funding and to “keep more of County’s loan production on-sheet over time.”
Keefe, Bruyette & Woods and Bryan Cave Leighton Paisner advised Nicolet. Stephens and Barack Ferrazzano Kirschbaum & Nagelberg advised County.