Through the deal, Farmers & Merchants adds a full-service office in Urbana, Ohio

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Perpetual Federal Savings Bank to be acquired by Farmers & Merchants Bancorp. (Credit: Gerd Altmann from Pixabay)

Farmers & Merchants Bancorp (F&M) has agreed to acquire Ohio-based Perpetual Federal Savings Bank (PFSB) in a stock-cum-cash deal worth $103.7m.

Perpetual Federal Savings Bank runs a full-service office in Urbana, Ohio, through which it offers financial products and services.

As of 31 March 2021, the bank had $391m in total assets, loans of $326m, deposits of $305m, and tangible equity of $79m.

On the other hand, Farmers & Merchants Bancorp is the holding company for Farmers & Merchants State Bank, a community bank that serves Northwest Ohio and Northeast Indiana.

Through the acquisition, the company will grow its community banking franchise into the Urbana, Columbus, Springfield, Dayton, Piqua, Troy, Tipp City, and Sidney markets. Besides, it supports considerable fill-in potential between Findlay and Urbana, said Farmers & Merchants Bancorp.

Post-acquisition, Farmers & Merchants Bancorp will have 31 offices in Ohio and Indiana.

On a pro forma basis on 31 March 2021, Farmers & Merchants Bancorp has $2.51bn in total assets, total deposits of $2.12bn, and $1.73bn in total loans.

The transaction with Perpetual Federal Savings Bank follows the completion of the $20m acquisition of Ossian Financial Services, the holding company for Ossian State Bank in April 2021.

Farmers & Merchants Bancorp president and CEO Lars Eller said: “This transaction is an excellent opportunity for PFSB to become part of a larger community banking organisation that offers customers a wider range of financial services.”

“F&M has created a successful acquisition platform and PFSB represents F&M’s fourth acquisition over the past two years of banking and complementary financial services companies.

“F&M’s acquisition strategy, combined with a history of strong organic growth, have contributed to a 125% increase in total assets on a pro forma basis since 2018.”

Based on the terms of the deal, Perpetual Federal Savings Bank’s shareholders will have the option to be issued 1.7766 shares of Farmers & Merchants Bancorp or $41.2 per share. This will be subject to adjustment based upon 1.83 million shares of Farmers & Merchants Bancorp to be issued in the merger.

Perpetual Federal Savings Bank president and CEO Michael Melvin said: “With a shared community-oriented culture, F&M’s scale, diversity, and expertise enhances our service offerings.

“F&M has a history of completing successful acquisitions and provides PFSB with the necessary resources to pursue compelling growth opportunities throughout our markets.”