Guaranty’s subsidiary Guaranty Bank will be merged into QCR’s Springfield First Community (SFC) Bank, with Guaranty Bank as surviving entity
Guaranty Bank will be merged into SFC Bank. (Credit: PublicDomainPictures from Pixabay.)
QCR Holdings, the parent organisation of Springfield First Community Bank, has agreed to acquire Guaranty Federal Bancshares in a cash and share deal valued at around $151.6m.
As part of the acquisition, Guaranty’s banking subsidiary Guaranty Bank will be merged into QCR’s Springfield First Community (SFC) Bank, with Guaranty Bank as surviving entity.
Under the terms of the agreement, Guaranty shareholders will receive $30.50 in cash, and 0.58775 shares of QCR common stock for each share of Guaranty common stock held.
The shareholders may also receive mixed consideration of $6.10 in cash and 0.4702 shares of QCR common stock for each share, constituting around 80% stock and 20% cash.
The boards of directors of both organisations have unanimously approved the merger.
The transaction is expected to close in the first or second quarter of 2022, subject to regulatory approvals and certain customary closing conditions.
Upon closing, SFC Bank president and CEO Monte McNew will be appointed as CEO of the combined bank, while Guaranty Bank president and CEO Shaun Burke as president.
McNew said: “This partnership positions us to become the preeminent bank in this market. We look forward to demonstrating the value of this merger to all of our stakeholders by showing how we’re better together.”
Burke said: “Joining the QCR Holdings family and the team at SFC Bank is an exciting opportunity for us to expand our product and service offerings while continuing our track record of delivering exceptional client service.”
Established in 1913, Guaranty Bank has 16 banking locations, in Springfield, Joplin, Carthage, Ozark, Nixa and Neosho, Missouri.
The bank, which reported around $1.2bn in assets and $1bn in deposits as of 30 September 2021, is said to complement and expand QCR’s footprint in the region.
The combined bank is expected to have around $2bn in total assets, $1.5bn in total loans and $1.6bn in total deposits as of 30 September 2021.
QCR said that the transaction may be around 13% accretive to earnings per share in 2023, excluding one-time merger-related expenses.
Piper Sandler & Co. served as a financial advisor, and Barack Ferrazzano Kirschbaum & Nagelberg as legal counsel to QCR on the transaction.
Keefe, Bruyette & Woods served as financial advisors, while Sidley Austin was legal counsel to Guaranty Bancshares.
QCR Holdings president, chief operating officer and chief financial officer Todd Gipple said: “Our M&A strategy has always been about finding the right partners in the right markets that share our core values and business strategy.
“The blending of talent and expertise from both SFC Bank and Guaranty Bank, and the increased product and service capabilities of the combined bank, will result in continued strong growth in Springfield and surrounding communities.”