Equity Bancshares in Wichita, Kan., has agreed to buy Rockhold Bancorp in Kirksville, Mo.
The $4.9 billion-asset Equity also said in a press release that it sold $442 million of available-for-sale securities at an after-tax loss of $38.2 million. Proceeds will be redeployed in cash, investment and loan assets – producing $16.2 million of annual interest income going forward.
Equity will pay $44.3 million in cash for the parent of the $406 million-asset Bank of Kirksville. The deal, which is expected to close in the first quarter, priced Rockhold at 127% of its tangible book value.
Rockhold will pay a pre-closing special dividend of $17.8 million, subject to adjustment and contingent on delivering at least $34.2 million of tangible common equity.
Rockhold has eight branches, $344 million of deposits and $122 million of loans.
“We couldn’t be more pleased to add another strong community bank to our network,” Brad Elliott, Equity’s chairman and CEO, said in the release. “Our teams continue to work diligently to add customers, colleagues, and market locations within our four-state footprint, and we’re pleased to enter Kirksville and serve a vibrant customer base.”
Equity said it expects the deal to be 12% accretive, to its 2024 earnings per share and 14.3 accretive the following year. It should take a little more than a year for Equity to earn back an estimated 3.4% dilution to its tangible book value.
Norman Belitz, CEO of Bank of Kirksville, will join Equity as a regional market president.
Equity plans to cut about 18% of Rockhold’s annual noninterest expenses, or $1.2 million. The company expects to incur $4.4 million of merger-related expenses.
Equity was advised by Stephens and Norton Rose Fulbright US. Rockhold was advised by Stinson and The Capital Corporation provided a fairness opinion.