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Farmers & Merchants (FMAO) to Buy Peoples-Sidney for $27 Million

·4-min read

Farmers & Merchants Bancorp, Inc. FMAO has entered an agreement to acquire Peoples-Sidney Financial Corporation and its wholly-owned subsidiary, Peoples Federal Savings and Loan Association. The stock-cum-cash deal is valued at $27 million.

Based in Sidney, OH, Peoples has two full-service branch offices in Anna and Jackson Center, with a drive-through facility in Sidney. As of Mar 31, 2022, Peoples had $132.7 million in total assets, $99.9 million in loans, $114.8 million in deposits and $15.4 million in tangible common equity.

Following the deal closure, Farmers & Merchants Bancorp will have total deposits of $2.4 billion, total loans of $2.1 billion, and total assets of $2.8 billion on a pro-forma basis as of Mar 31, 2022.

Per the deal, shareholders of Peoples will elect to receive either 0.6597 shares of FMAO stock or $24 per share in cash for each of their shares owned, subject to a minimum of 65% of all Peoples shares being exchanged for the FMAO stock. As of Mar 31, 2022, Peoples reported 1,167,025 shares of common stock outstanding.

Excluding one-time transaction costs, the acquisition is expected to be accretive to FMAO’s estimated 2023 and 2024 diluted earnings per share by 2.5% and 3.9%, respectively. At closing, the tangible book value per share is expected to be diluted by 2.1%, which will likely be recovered in 3.25 years using the crossover method.

Lars Eller, the president and CEO of Farmers & Merchants Bancorp, stated, “The combination of Peoples and F&M 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. 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.”

He added, “F&M has created a successful acquisition platform and Peoples represents F&M’s fifth acquisition since year-end 2018, including four community banking organizations and one complementary financial services company. F&M’s acquisition strategy, combined with a history of strong organic growth, have contributed to a 33% compound annual growth rate for total assets on a pro forma basis since year-end 2018.”

The president and CEO of Peoples, Debra A. Geuy, stated, “We are very excited to be joining forces with F&M. The two organizations have similar community-focused cultures, and F&M’s scale, diversity, and expertise will dramatically enhance the services we will be able to offer to existing and new customers alike.”

Over the past year, shares of Farmers & Merchants Bancorp have gained 53.7% against a decline of 13.3% recorded by the industry.


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Currently, FMAO carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Upon the deal closure, BNY Mellon Investment Management is expected to continue to offer Alcentra’s capabilities in BNY Mellon’s sub-advised funds and select regions via its global distribution platform, and will provide Alcentra with ongoing asset servicing support.

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