Wooster, Ohio-based Wayne Savings Bancshares Inc., the parent company of Wayne Savings Community Bank, and Wheeling, W.Va.-based Main Street Financial Services Corp., the holding company of Main Street Bank Corp, entered into an agreement following which Wayne Savings Bancshares will merge with and into Main Street Financial in an all-stock transaction valued at roughly $68 million.
The transaction value equates to $30.53 per Wayne Savings Bancshares share based on Main Street Financial's stock price of $17.50 as of Feb. 22, according to a news release.
As part of the agreement, Main Street Bank will merge with and into Wayne Savings Community Bank, and the combined bank will be branded as Main Street Bank.
Under the terms of the merger, Wayne Savings Bancshares common stockholders will have the right to receive 1.7446 shares of Main Street Financial common stock.
Upon completion of the transaction, Main Street Financial's existing shareholders will own approximately 47.5% of the outstanding shares of the combined company, and Wayne Savings Bancshares shareholders are expected to own roughly 52.5%.
The transaction is expected to be approximately 40% accretive to Main Street Financial's EPS on a fully phased-in basis, excluding merger charges, and approximately 16% accretive to Wayne Savings Bancshares' EPS on a fully phased-in basis, excluding merger charges, on an exchange ratio-adjusted basis.
Upon closing of the transaction, Main Street Financial expects to increase its quarterly dividend to approximately 13 cents per share.
S&P Global Market Intelligence valuations for bank and thrift targets in the Midwest region between Feb. 23, 2022, and Feb. 23, 2023, averaged 143.31% of book and 145.79% of tangible book and had a median of 14.06x last-12-months earnings, on an aggregate basis, and averaged 133.61% of book and 142.14% of tangible book and had a median of 13.02x LTM earnings, on a per-share basis.
At the announcement, S&P Global Market Intelligence calculates the deal value to be 149.67% of common equity, 155.65% of tangible common equity, 11.05% of deposits, 9.17% of assets, 11.25% of net receivables and 7.77x earnings.
Main Street Financial Services will enter Ohio with 11 branches to be ranked No. 55 with a 0.11% share of approximately $478.89 billion in total market deposits.
The merger is expected to close in the second half, subject to satisfaction of customary closing conditions, including regulatory approvals and approvals from both companies' shareholders.
The administrative and bank headquarters of the combined company will be in Wooster, Ohio.
The merged entity will trade under Main Street Financial's ticker symbol, MSWV, on the OTCQX and will operate under the name Main Street Financial Services Corp. while the combined bank will operate under the Main Street Bank Corp. name.
The board of the combined company will have 13 directors, consisting of seven directors from Wayne Savings Bancshares and six from Main Street Financial.
Wayne Savings Bancshares Executive Chairman Mark Witmer will be the executive chairman while Main Street Financial Executive Chairman Nicholas Sparachane will be vice chairman of the combined company board.
The combined company's management team will be led by Witmer. Wayne Savings Bancshares' current president and CEO, James VanSickle II, will be the president and CEO of the combined company and CEO of the combined subsidiary bank.
VanSickle will also be interim CFO of the combined company and subsidiary bank. Main Street Financial's current CEO, Richard Lucas, will be president of the combined bank subsidiary.
Main Street Financial Executive Vice President and Chief Business and Risk Officer Todd Simko will be the executive vice president and COO of the combined bank subsidiary.
Piper Sandler & Co. was the financial adviser and delivered a fairness opinion to the Wayne Savings Bancshares board while Dinsmore & Shohl LLP was the legal counsel on the transaction. Raymond James & Associates was the financial adviser and delivered a fairness opinion to Main Street Financial's board while Jackson Kelly PLLC was the legal counsel on the transaction.
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