First Mid Bancshares in Mattoon, Ill., has agreed to buy Delta Bancshares in St. Louis, along with a loan and deposit portfolio in the city.
The $5.8 billion-asset First Mid said in a press release Thursday that it will pay $15.2 million in cash and stock for the $697 million-asset Delta. The deal, which is expected to close in the fourth quarter, priced Delta at 141% of its tangible book value.
Delta has five branches, $484 million of loans and $546 million of deposits.
First Mid also agreed to buy $225 million of loans and $280 million of deposits from an unnamed financial institution. The acquisition, which will include four commercial lenders, is expected to close in September.
First Mid said it expected the deals to be 14% accretive to its 2022 earnings per share, excluding merger-related charges. It should take less than two years for First Mid to earn back an estimated 3% dilution to its tangible book value.
First Mid said it plans to cut about a third of Delta’s annual noninterest expense. The company expects to incur $5 million of merger-related charges.
“The geographic synergies and financial metrics of these transactions are compelling and consistent with our strategy of deepening our presence in the attractive St. Louis market,” Joe Dively, First Mid’s chairman and CEO, said in the release.
“The proposed loan and deposit acquisition is similar to the one we completed in April of last year,” Dively added. “We reviewed nearly all the loans and have extensive knowledge with both the borrowers and the commercial lenders. I anticipate this being a smooth transition.”
Stephens and Schiff Hardin advised First Mid on the Delta transaction. Piper Sandler and Armstrong Teasdale advised Delta.