United Community Financial and Ohio Legacy have jointly announced that they have entered into a definitive agreement and plan of merger pursuant to which UCFC will acquire Ohio Legacy, parent of Premier Bank & Trust.
Based on United Community’s closing price as of September 7, 2016, the transaction is valued at approximately $18.00 per Ohio Legacy common share or approximately $40.3m in the aggregate.
Premier Bank & Trust is headquartered in North Canton, Ohio, has approximately $320m in total assets and operates four full-service banking centers located in North Canton, Fairlawn and St. Clairsville, Ohio as well as a full-service wealth management and trust division.
As a result of the merger, it is anticipated that United Community and Home Savings will add Ohio Legacy’s current Chairman, Louis Altman, to their Boards of Directors. In addition, Rick Hull, Ohio Legacy’s President & CEO, and Denise Penz, Ohio Legacy’s Executive Vice President & COO, will join Home Savings as Regional President and Head of Wealth Management, respectively.
Gary Small, President & CEO of United Community stated, “We are very pleased to be partnering with Premier Bank & Trust and expanding our presence in Canton, Akron and St. Clairsville. Premier’s strengths fit perfectly with Home Savings’ focus on commercial banking and they bring wealth management and trust capabilities we can leverage across the entire Home Savings footprint. I am looking forward to working with Rick, Denise and Lou, all of whom are great leaders and seasoned professionals, in building an outstanding banking franchise. The Premier team enjoys a well-deserved reputation in the marketplace, and we look forward to a great future together.”
Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, holders of Ohio Legacy common stock will elect to receive either 2.736 shares of United Community common stock or $18.00 per share in cash for each share of Ohio Legacy common stock held, or a combination of the two.
The transaction is subject to 50% of the shares of Ohio Legacy outstanding at close being exchanged for shares of United Community common stock and 50% of the shares being exchanged for cash consideration. Shareholder elections of United Community stock or cash may need to be adjusted accordingly.
Shares of Ohio Legacy preferred stock will be deemed to convert into common shares immediately prior to the closing of the transaction. The transaction is expected to close in the first quarter of 2017, subject to approval by the shareholders of Ohio Legacy, receipt of all required regulatory approvals and fulfillment of other customary closing conditions.
The deal value equates to 140% of Ohio Legacy’s June 30, 2016 tangible book value1, 6.5% premium to core deposits, 30.6x Ohio Legacy’s last-twelve months earnings, and 8.6x Ohio Legacy’s estimated 2017 earnings (including fully phased-in cost synergies).
Excluding certain one-time charges, the transaction is anticipated to be accretive to earnings per share (EPS) by approximately 15% in 2017. Tangible book value per common share is expected to be diluted by less than 6% at closing, with a projected earn back period of 3.9 years using the “cross-over”2 method.
Rick Hull stated, “I am very proud of what our team has been able to accomplish since our recapitalization in 2010. The opportunity to partner with Home Savings provides our team the ability to expand relationships that had been constrained because of our size, and to continue providing the exceptional personal service our clients have come to expect. Home Savings is an outstanding community institution with a strong management team focused on decisions being made by the professionals who are closest to their clients. We look forward to being a significant part of that team and building additional value for our combined shareholders and communities.”
Pursuant to the terms of the Agreement, the officers and directors of Ohio Legacy have agreed to vote all of their shares of Ohio Legacy in favor of the merger and to vote all of their interests (and those interests of their affiliates under their control) in Ohio Legacy’s largest shareholder in favor of the merger.
Raymond James & Associates, Inc. served as financial advisor to United Community and Tucker Ellis LLP is serving as legal counsel to United Community. Sandler O’Neill & Partners, L.P. served as financial advisor to Ohio Legacy and Vorys, Sater, Seymour and Pease LLP is serving as legal counsel to Ohio Legacy.