Bank First in Manitowoc, Wis., has agreed to buy Hometown Bancorp in Fond Du Lac, Wis.
The $2.9 billion-asset Bank First said in a press release Tuesday that it will pay $124 million in cash and stock for the $628 million-asset Hometown. The deal, which is expected to close in the fourth quarter, valued Hometown at 213% of its tangible book value.
Hometown has $421 million of loans and $539 million of deposits.
Bank First said Hometown’s shareholders and customers will benefit from its minority stake in UFS, a bank technology outfitter that provides digital, core, cybersecurity, managed IT and cloud services to Midwestern banks.
Tim McFarlane, Hometown’s president and CEO, will become Bank First’s president and will join its board.
The deal is expected to be 13% accretive to Bank First’s earnings per share in the first full year of operations, including cost savings. It should take a little over two years for Bank First to earn back any dilution to its tangible book value.
Bank First plans to cut about 40% of Hometown’s annual noninterest expense. The company expects to incur $8.7 million of merger-related expenses.
Piper Sandler and Alston & Bird advised Bank First. Reinhart Boerner Van Deuren advised Hometown.