Richmond Mutual Bancorp. in Richmond, Ind., has agreed to buy Farmers Bancorp in Frankfort, Ind.
The $1.5 billion-asset Richmond Mutual said in a press release that it will pay $82 million in stock for the $1.1 billion-asset Farmers. The deal, which is expected to close in the second quarter, priced Farmers at 100% of its tangible book value.
The combined bank will be rebranded before closing. Five Farmers’ directors will join Richmond Mutual’s 11-member board.
The acquisition “marks the beginning of a strong and promising future for our newly unified organization,” Garry Kleer, Richmond Mutual’s chairman, president and CEO, said in the release. “We are bringing together two well-established community banks, both dedicated to delivering exceptional client experiences and helping individuals and businesses achieve their financial goals.”
The acquisition is expected to be 35% accretive to Ricmond Mutual’s earnings per share, including cost savings. It should take about two years for Richmond Mutual to earn back an estimated 13% dilution to its tangible book value.
Richmond Mutual plans to cut 22.5% of Farmers’ annual operating expenses. It expects to incur $12.5 million of merger-related expenses.
Barbara Cutillo, Farmers’ chair, will become vice chair at Richmond Mutual. Chris Cook, Farmers’ president and CEO, will serve as Richmond Mutual’s president and the bank’s president and CEO.
Janney Montgomery Scott and Amundson Davis advised Farmers. Keefe, Bruyette & Woods and Silver, Freedman, Taff & Tiernan advised Richmond Mutual.