Manitowoc, Wis.-based Bank First Corp., the holding company of Bank First NA, agreed to acquire 100% of the common stock of in-state peer Hometown Bancorp Ltd., the holding company of Hometown Bank, in a combined stock-and-cash transaction valued at approximately $124 million.
The closing of the acquisition is expected to be completed in the fourth quarter, subject to customary closing conditions, including regulatory approval, approval by Hometown Bancorp's shareholders, and obtaining a conversion date from UFS LLC and Fiserv Inc., according to a news release.
Each Hometown Bancorp shareholder will have the option to receive either $29.16 in cash or 0.3962 of a share of Bank First Corp.'s common stock in exchange for each share of Hometown Bancorp common stock, subject to customary proration and allocation procedures, such that no less than 70% of Hometown Bancorp shareholders will receive stock consideration and no greater than 30% will receive cash consideration.
The transaction value is based on the closing price of Bank First Corp. common stock as of July 22 of $75.23 per share.
At announcement, S&P Global Market Intelligence calculates the deal value to be 189.85% of common equity and 210.89% of tangible common equity, 22.37% of deposits, 19.22% of assets and 14.29x earnings. The tangible book premium-to-core deposits ratio is 12.06%.
Market Intelligence valuations for bank and thrift targets in the Midwest region between July 25, 2021, and July 25, 2022, averaged 145.63% of book and 147.56% of tangible book and had a median of 15.32x last-12-months earnings, on an aggregate basis.
With the completion of the deal, Bank First Corp. will expand in Wisconsin by 11 branches to be ranked eighth with a 1.49% share of approximately $200.72 billion in total market deposits, according to Market Intelligence data.
Hometown Bancorp President and CEO Tim McFarlane will become president and join the board of Bank First NA upon completion of the merger. McFarlane will also be nominated to Bank First Corp.'s board, according to the news release.
Bank First Corp. President and CEO Mike Molepske will remain CEO and board chairman of Bank First Corp. and its subsidiary.
As a result of the deal, Hometown Bancorp shareholders and customers will also benefit from Bank First Corp.'s 49.8% ownership of UFS, a bank technology outfitter, which provides digital, core, cybersecurity, managed IT and cloud services to banks in the Midwest.
As of June 30, Hometown Bancorp had approximately $627.6 million in consolidated assets, $421.2 million in gross loans, $538.7 million in deposits and $65.5 million in consolidated stockholders' equity.
Inclusive of projected balances to be acquired from the proposed acquisition of Denmark Bancshares Inc., the combined company will have total assets of approximately $4.3 billion, loans of approximately $3.3 billion and deposits of approximately $3.7 billion, based on the financial results as of June 30.
The agreement between Bank First Corp. and its in-state peer Hometown Bancorp carries a termination fee of $6.2 million, payable by Hometown Bancorp in case the deal is canceled under certain conditions.
Piper Sandler & Co. was the financial adviser to Bank First Corp. and Alston & Bird LLP acted as legal counsel. Reinhart Boerner Van Deuren SC served as legal counsel to Hometown Bancorp.
To use S&P Capital IQ Pro's branch analytics tools to compare market overlap, click here. To create custom maps, click here.
