Farmers & Merchants Bancorp in Archbold, Ohio, has agreed to buy Peoples-Sidney Financial in Sidney, Ohio.
The $2.6 billion-asset F&M said in a press release Tuesday that it will pay $27 million in cash and stock for the $133 million-asset parent of Peoples Federal Savings and Loan Association. The deal, which is expected to close in the third or fourth quarter, priced Peoples-Sidney at 175% of its tangible book value.
Peoples has four branches, $100 million of loans and $115 million of deposits.
The acquisition “creates immediate value for our shareholders, customers, and communities and I am excited to expand F&M’s community-oriented banking in Sidney and greater Shelby County,” Lars Eller, F&M’s president and CEO, said in the release.
“This transaction is an excellent opportunity for Peoples to become part of a larger community banking organization that offers customers a wider range of financial services,” Eller added.
Peoples is the fifth acquisition for F&M since the end of 2018.
F&M said it expects the deal to be 2.5% accretive to its 2023 earnings per share, excluding merger-related costs. It should take a little over a year for the company to earn back an estimated 2.1% dilution to its tangible book value.
F&M expects to cut 26.7% of Peoples-Sidney’s annual noninterest expenses. It expects to incur $3 million of merger-related charges.
F&M was advised by Piper Sandler and Shumaker, Loop & Kendrick. Peoples was advised by Boenning & Scattergood and Vorys, Sater, Seymour and Pease.