Eagle Bancorp Montana, Inc. (EBMT: Quote) and its wholly-owned subsidiary, American Federal Savings Bank, announced the signing of a definitive agreement to buy seven branch banking locations from Sterling Savings Bank, a wholly-owned subsidiary of Sterling Financial Corp (STSA: Quote).
As per the deal terms, Eagle will acquire about $187 million of deposits for an estimated deposit premium of 3.88%, or approximately $7.3 million. Additionally, Eagle will receive approximately $44 million of pass-rated, performing loans. It is expected that the deal will be immediately accretive to Eagle's earnings per share.
Upon completion of the transaction, Eagle expects to have total assets exceeding $500 million, total deposits in excess of $400 million, and a tangible common equity to tangible assets ratio of approximately 9%.
"...This transaction will provide our existing customers with added convenience and service and our new customers with the opportunity to enjoy the outstanding personalized service and commitment of a Montana-based community bank," said Peter Johnson, President and CEO. Of the seven branches being acquired six are in new markets for Eagle, including two in Missoula, one in Billings, and one each in Hamilton, Livingston and Big Timber. The seventh is in Bozeman where Eagle already has a presence.
The transaction would expand Eagle's franchise to 13 branches and extend its branch network throughout Southern Montana. In addition, the transaction strengthens Eagle's mortgage origination franchise and adds a wealth management business headquartered in Bozeman.
The deal is anticipated to be completed during the second quarter of Eagle's fiscal 2013.
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by RTT Staff Writer
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