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FENTON, Mich. and MUNITH, Mich., June 22, 2021 (GLOBE NEWSWIRE) -- The boards of directors of Fentura Financial, Inc. (OTCQX: FETM), the holding company for Fenton-based The State Bank, and Farmers State Bank based in Munith, today announced the execution of a definitive agreement by which Fentura Financial, Inc. (“Fentura”) will acquire Farmers State Bank (“FSB”) for $15.5 million in cash consideration. Based on current shares outstanding, shareholders of FSB will receive $103.33 in cash for each share.
The Boards of Directors of both financial institutions have unanimously approved the purchase, which will include the acquisition of all FSB’s stock by Fentura. Excluding transaction costs, Fentura expects earnings per share (“EPS”) to be enhanced by 12-14% in each of the first two years following closing. The transaction is expected to dilute tangible book value by 6.1% at closing but anticipates earn back of the tangible book value dilution in less than four years using the crossover method. An investor presentation providing more details on the transaction can be found on Fentura’s website at www.fentura.com.
As of March 31, 2021, FSB reported $104 million in assets, $45 million in loans and $95 million in deposits. The State Bank’s branch offices will increase to 20 locations, with the addition of FSB’s offices in Munith, Stockbridge and Grass Lake.
Ron Justice, President & CEO of Fentura stated, “We are excited for the opportunity to partner with Farmers State Bank and expand The State Bank into Ingham and Jackson counties. The combination brings together two organizations that believe in community banking and a shared commitment to serving our clients and local communities. The resulting Bank operations will further enhance our strong core deposit base, allowing us to enhance shareholder value by taking advantage of asset growth opportunities and expansion into new market areas.”
Craig Goodlock, Chairman & CEO of FSB commented, “I am so pleased to be able to introduce The State Bank to the communities I have served for some forty years and that this bank has served for nearly one hundred years. It is heartening to me to note that The State Bank is actually twenty-four years older than Farmers State Bank, having been formed in 1898! The State Bank is a well-run, well-performing institution with which I have been familiar throughout much of my career. The combination of our two community banks will provide a greater suite of both consumer and commercial products, the trust and wealth management products that Farmers State Bank has not been able to offer but are in great demand locally, and expanded on-line access for opening deposit accounts and completing loan applications. The residents of our towns, villages, and countryside will be very pleased with what this merged community bank can do for them.”
Jeanne Richter, President & CFO of FSB added, “In The State Bank we have found a partner that complements our values, community, and relationships. Knowing we can bring additional opportunities to our customers while maintaining our focus on customer service and community is what makes this partnership so exciting.”
Upon completion of the transaction, Jeanne Richter will join the senior management team of The State Bank and Craig Goodlock will retire.
The transaction is contingent on approval by the shareholders of FSB, the Federal Deposit Insurance Corporation, the Michigan Department of Insurance and Financial Services and the Federal Reserve Bank of Chicago. It is anticipated that closing of the transaction will occur during the fourth quarter of 2021.
Fentura is being advised by the investment banking firm ProBank Austin and the law firm Howard & Howard Attorneys PLLC. FSB is being advised by the investment banking firm Donnelly Penman & Partners, Inc. and the law firm Bodman, PLC.
About Fentura Financial, Inc. and The State Bank
Fentura Financial, Inc. is the holding company for The State Bank. It was formed in 1987 and is traded on the OTCQX exchange under the symbol FETM, and has been recognized as one of the Best 50 performing stocks in recent years on that exchange.
The State Bank, founded in 1898, is a full-service, 5-Star Bauer Financial rated commercial, retail and trust bank headquartered in Fenton, Michigan. It currently operates 17 full-service branches in Genesee, Livingston, Oakland, Saginaw, and Shiawassee Counties. The State Bank’s commercial department provides a complete array of products including lines of credit, term loans, commercial mortgages, SBA loans and a full-suite of cash management products. The retail department offers personal checking, savings, time and IRA deposit accounts and a wide array of loan products including home equity, auto and personal loans. The residential loan department offers construction, purchase and refinance residential mortgage loans. The wealth management department offers a full-service suite of trust and portfolio management services. More information can be found at www.thestatebank.com or www.fentura.com.
About Farmers State Bank
Farmers State Bank, founded in 1922, is an independent community bank committed to providing services to residents and businesses in Jackson, Ingham, Livingston, and Washtenaw Counties. It has assets of approximately $104 million and currently operates offices in Munith, Stockbridge and Grass Lake. More information can be found at www.farmerstatebank.com.
Forward Looking Statements
This press release contains statements about the anticipated results of the consolidation of Fentura and FSB that are not statements of historical fact. These statements are “forward looking statements” for purposes of applicable securities laws, and are based on current information and/or management’s good faith belief as to future events. The words “estimate,” “believe,” “expect,” “anticipate,” and similar expressions signify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance. By their nature, forward-looking statements involve inherent risk and uncertainties, which change over time; and actual performance could differ materially from those anticipated by any forward-looking statements. Fentura undertakes no obligation to update or revise any forward-looking statement.
Ronald L. Justice
Aaron D. Wirsing
Craig M. Goodlock
Jeanne E. Richter