Following the acquisition, the combined company will operate through 63 branches, with total assets valuing nearly $5.9bn
Stock Yards Bancorp, the parent company of Stock Yards Bank and Trust Co., has agreed to acquire Kentucky Bancshares, the parent company of Kentucky Bank, in a combination of stock and cash transaction worth about $190m.
Under the terms of the agreement, Kentucky Bancshares’ shareholders will receive 0.64 shares of Stock Yards Bancorp’s common stock and $4.75 per share of Kentucky Bancshares common stock in cash.
The company said that the total consideration will be comprised of around 85% stock and 15% cash.
Also, the purchase price of $31.78 per share is implied based on the closing price of Stock Yards Bancorp common stock of $42.24 per share on 25 January 2021.
Stock Yards Bancorp chairman and CEO James Hillebrand said: “We are thrilled to welcome Kentucky Bancshares and its employees to the Stock Yards team.
“This transaction expands our presence into the attractive Central Kentucky market and represents a complementary fit, both strategically and culturally, with our business model.
“The combination of our two organisations provides the opportunity to create efficiencies and enhance the value of the combined company while offering Kentucky Bank customers broader product offerings, increased lending capabilities and an expanded branch delivery system that stretches throughout the Louisville, Indianapolis and Northern Kentucky/Cincinnati metropolitan markets.
Based in Paris, Kentucky, Kentucky Bancshares is the holding company for Kentucky Bank, which operates 19 branches in 11 communities throughout central Kentucky.
The bank serves Lexington, Kentucky metropolitan statistical area, with around $1.2bn in assets, $767m in loans, $979m in deposits and $114m in tangible common equity, as of 31 December 2020.
Kentucky Bancshares also operates a Wealth Management and Trust Department with a total of $258m assets under management at 31 December 2020.
The acquisition is expected to be completed during the second quarter of 2021, subject to the approval of Kentucky Bancshares shareholders, customary regulatory approval and certain other closing conditions.
Following the acquisition, the combined company will operate through 63 branches, with total assets valuing nearly $5.9bn, gross loans of $4.3bn, $5bn in deposits and more than $4.1bn in trust assets under management.
In relation with the transaction, two of the previous Kentucky Bancshares Board directors Shannon Arvin, and Edwin Saunier will be appointed to the Stock Yards Board.
Keefe Bruyette & Woods, A Stifel Company served as financial advisor and Frost Brown Todd as legal counsel to Stock Yards Bancorp for the transaction.
Raymond James served as financial advisor and Stoll Keenon Ogden as legal counsel to Kentucky Bancshares.