Middlefield Banc Corp. in Middlefield, Ohio, has agreed to buy Liberty Bancshares in Ada, Ohio.
The $1.3 billion-asset Middlefield said in a press release Thursday that it will pay $64.4 million in stock for the $437 million-asset Liberty. The deal, which is expected to close in the fourth quarter, priced Liberty at 115% of its tangible book value.
Liberty has six branches, $297 million of loans and $379 million of deposits.
Liberty “complements our growth in the central Ohio market, and expands our footprint to the compelling northwest Ohio market,” James Heslop II, Middlefield’s president and CEO, said in the release.
“We believe this is a compelling transaction that generates meaningful earnings per share accretion, has a minimal tangible book value dilution and manageable earn-back period,” Heslop added.
Ronald Zimmerly Jr., Liberty’s president and CEO, will become Middlefield’s president, assuming shareholders approve amendments to the company’s regulations to split the roles of president and CEO.
Three Liberty directors will join Middlefield’s board. Those additions would be Zimmerly, Liberty Chairman Mark Watkins and Spencer Cohn, a representative of Castle Creek Capital, Liberty’s biggest shareholder.
Middlefield said it expects the transaction to be 5.6% accretive to its 2023 earnings per share. It should take three years to earn back an estimated 3% dilution to tangible book value.
Middlefield plans to cut about a third of Liberty’s annual noninterest expenses. The company expects to incur $7 million of merger-related charges.
Keefe, Bruyette & Woods and Grady & Associates advised Middlefield. Raymond James and Vorys, Sater, Seymour and Pease advised Liberty.