Transaction will create one of the largest
community banks in Southwest Ohio
Expected to be accretive to earnings per share
in year one
Expected earn-back of tangible book value
dilution in approximately 2.1 years
LCNB Corp. (“LCNB”) (NASDAQ: LCNB), the holding company for LCNB
National Bank, and Eagle Financial Bancorp, Inc. (“EFBI” or
“Eagle”) (OTCQB: EFBI), the holding company for EAGLE.bank,
announced today that they have signed a definitive merger agreement
whereby LCNB will acquire EFBI in a stock-and-cash transaction.
EAGLE.bank operates three full-service banking offices in
Cincinnati, Ohio. EFBI had approximately $175.8 million in assets,
$140.8 million in loans, $135.0 million of deposits, and $26.3
million in consolidated stockholders’ equity as of September 30,
2023. When completed, the transaction will increase LCNB’s presence
in the Cincinnati market.
Subject to the terms of the merger agreement, which has been
approved by the Board of Directors of each company, EFBI
shareholders will have the opportunity to elect to receive either
1.1401 shares of LCNB stock or $19.10 per share in cash for each
share of EFBI common stock owned, subject to at least 60%, but not
more than 70% of the shares of EFBI being exchanged for LCNB common
stock. As of September 30, 2023, EFBI reported 1,342,275 shares of
common stock outstanding, as well as 115,807 options with a
weighted average strike price of $16.18 per share (each option
carries the right to purchase one EFBI share). Any unexercised
stock options of EFBI will be canceled, prior to the effective time
of the merger, in exchange for a cash payment per option equal to
the difference between $19.10 and the exercise price of the option.
Based on LCNB’s closing share price of $14.65 as of November 28,
2023, and assuming 60% of the EFBI shares elect stock, the
aggregate transaction value is $23.1 million and has a blended
value of $17.73 for each EFBI share. For EFBI this equates to 91%
of tangible book value as of September 30, 2023.
Eric Meilstrup, President and CEO of LCNB, stated, “We are
thrilled to announce the agreement with Eagle Financial Bancorp.
Eagle represents the second acquisition we have announced this
year, and further supports our growth in the Cincinnati region.
Upon completion of the transaction, LCNB will have 25 branches and
$1.4 billion in deposits within the Cincinnati MSA, adding to
LCNB’s position as one of the largest community banks in Southwest
Ohio.”
Mr. Meilstrup continued, “Both LCNB and Eagle have a similar
legacy of providing Southwestern Ohio communities with trusted
financial services for over 140 years. The combining of our two
institutions will provide more benefits, financial products, and
opportunities for Eagle’s customers, and create the premier
community banking institution in the Cincinnati / Northern Kentucky
market. We are excited to welcome Eagle’s employees, customers, and
shareholders to LCNB, and we believe this transaction will enhance
LCNB’s long-term profitability metrics and earnings growth
rate.”
Gary J. Koester, Chairman and CEO of EFBI, stated, “We are
excited to join LCNB, a Southwest Ohio-based bank that shares a
common philosophy focused on supporting customers, employees, and
communities. As part of a larger organization, we believe our
customers will benefit from expanded financial products and
resources, including trust and wealth management solutions, as well
as greater access to additional full-service bank locations
throughout the greater Cincinnati market. We also believe that our
employees will have greater opportunities for growth and
advancement as part of a larger community bank with such an
outstanding reputation. Finally, we believe our shareholders will
also benefit as part of a larger bank with greater liquidity,
strong earnings power, and a very attractive dividend yield.”
Following the merger, Patricia L. Walter, President of EFBI and
EAGLE.bank, will join LCNB as an Executive Vice President.
Excluding one-time transaction costs and assuming a second
quarter 2024 closing date, LCNB expects the transaction to be
modestly accretive in 2024 and approximately 11.5% and 11.1%
accretive to 2025 and 2026 fully diluted earnings per share,
respectively. One-time transaction costs to be incurred as part of
the transaction are estimated at $5.1 million, after-tax. Tangible
book value per share dilution is expected to be approximately 2.4%
at closing, with an expected tangible book value earn-back of
approximately 2.1 years using the crossover method. Excluding any
interest rate-related purchase accounting adjustments, the
transaction would be immediately accretive to tangible book
value.
When the transaction is completed, LCNB is estimated to have
consolidated assets of approximately $2.5 billion with 36 banking
offices in Ohio and one branch office in Northern Kentucky. Subject
to regulatory approval, EFBI shareholder approval and other
customary conditions set forth in the definitive merger agreement,
the transaction is anticipated to close in the second quarter of
2024. LCNB shareholder approval is not required. At closing,
EAGLE.bank's banking offices will become branches of LCNB.
LCNB is being advised by Hovde Group, LLC and Dinsmore &
Shohl LLP. EFBI is being advised by Janney Montgomery Scott LLC.
and Luse Gorman, PC.
Important Information for Investors and Shareholders:
This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities of LCNB. LCNB will file
a registration statement on Form S-4 and other documents regarding
the proposed business combination transaction referenced in this
press release with the Securities and Exchange Commission (“SEC”)
to register the shares of LCNB’s common stock to be issued to the
shareholders of EFBI. The registration statement will include a
proxy statement/prospectus which will be sent to the shareholders
of EFBI in advance of a special meeting of shareholders of EFBI
that will be held to consider and vote on the proposed transaction.
Investors and EFBI shareholders are urged to read the proxy
statement/prospectus and any other relevant documents to be filed
with the SEC in connection with the proposed transaction because
they will contain important information about LCNB, EFBI and the
proposed transaction. Investors and shareholders may obtain a free
copy of these documents (when available) through the website
maintained by the SEC at www.sec.gov. These documents may also be
obtained, without charge, by directing a request to LCNB Corp., 2
North Broadway, P.O. Box 59, Lebanon, Ohio 45036: Investor
Relations.
EFBI and certain of its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
shareholders of EFBI in connection with the proposed transaction.
Information about the directors and executive officers of EFBI may
be obtained by reading the proxy statement/prospectus regarding the
proposed transaction when it becomes available. Free copies of this
document may be obtained as described in the preceding paragraph
when it becomes available.
About LCNB Corp.:
LCNB Corp. is a financial holding company headquartered in
Lebanon, Ohio. Through its subsidiary, LCNB National Bank (the
“Bank”), it serves customers and communities in Southwest and
South-Central Ohio and Northern Kentucky. A financial institution
with a long tradition for building strong relationships with
customers and communities, the Bank offers convenient banking
locations in Butler, Clermont, Clinton, Fayette, Franklin,
Hamilton, Montgomery, Preble, Ross, and Warren Counties, Ohio. The
Bank also provides community-oriented banking services to customers
in Northern Kentucky through a bank office in Boone County,
Kentucky. The Bank continually strives to exceed customer
expectations and provides an array of services for all personal and
business banking needs including checking, savings, online banking,
personal lending, business lending, agricultural lending, business
support, deposit and treasury, investment services, trust and IRAs
and stock purchases. LCNB Corp. common shares are traded on the
NASDAQ Capital Market Exchange® under the symbol “LCNB.” Learn more
about LCNB Corp. at www.lcnb.com.
About Eagle Financial Bancorp, Inc.:
Eagle Financial Bancorp, Inc. is a bank holding company
headquartered in Cincinnati, Ohio. Originally chartered in 1882,
EAGLE.bank is a state-chartered bank operating under a universal
bank charter election in accordance with applicable Ohio law. At
September 30, 2023, EFBI had $175.8 million of total assets, $135.0
million of total deposits and $26.3 million of consolidated
stockholders’ equity. EAGLE.bank provides financial services
primarily to individuals, families, and businesses through its main
office and two branch offices located in Hamilton County, Ohio.
Safe Harbor Statement:
Statements made in this news release that are not historical
facts are “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, Section 21E
of the Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995. These statements are
subject to certain risks and uncertainties including, but not
limited to, failure to successfully complete the proposed
transaction and to successfully integrate EFBI into LCNB, which
includes the failure to retain the acquired customer relationships;
failure to obtain requisite regulatory and shareholder approvals
and satisfy other closing conditions; adverse changes in economic
conditions; the impact of competitive products and pricing; and the
other risks set forth in the LCNB’s filings with the SEC. As a
result, actual results may differ materially from the
forward-looking statements in this news release.
LCNB encourages readers of this news release to understand
forward-looking statements to be strategic objectives rather than
absolute targets of future performance. LCNB undertakes no
obligation to update these forward-looking statements to reflect
events or circumstances after the date of this news release or to
reflect the occurrence of unanticipated events, except as required
by applicable legal requirements. Copies of documents filed by LCNB
with the SEC are available free of charge at the SEC’s website at
www.sec.gov and/or from LCNB’s website.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231128119216/en/
LCNB Company Contact: Eric J. Meilstrup President
Chief Executive Officer LCNB National Bank (513) 932-1414
Shareholderrelations@lcnb.com
LCNB Investor and Media Contact: Andrew M. Berger
Managing Director SM Berger & Company, Inc. (216) 464-6400
andrew@smberger.com
EAGLE.bank Company Contact Gary J. Koester
Chairman and Chief Executive Officer EAGLE.bank (513) 574-0700
gary.koester@eagle.bank
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