- First Defiance Financial (FDEF) to acquire United Community Financial (NASDAQ:UCFC) in a stock-for-stock transaction for total value of $473M.
- Each shareholders of United Community will receive 0.3715 shares of First Defiance Financial, based on the closing price of First Defiance as of September 6, 2019 of $26.32.
- Upon closing, First Defiance shareholders will own ~52.5% of the combined company and United Community shareholders will own ~47.5%.
- The pro forma combined company will have ~$6.1B in assets, $5B in loans and $4.9B in deposits, utilizing financial information as of June 30, 2019.
- The transaction is expected to close early in 1Q20.
- The combined company will operate under a name to be jointly determined prior to closing and the holding company will be headquartered in Defiance, Ohio with the bank headquartered in Youngstown, Ohio.
- First Defiance expects the transaction to deliver run-rate earnings per share accretion of ~14%, with cost savings on a fully-phased in basis.
- Applying pro forma merger adjustments and assuming an expected early 2020 closing, dilution to tangible book value per share is estimated to be ~4%, inclusive of restructuring charges with an earnback period of ~1.8 years using the crossover method.
- On a pro forma basis, the business is expected to deliver top-tier operating and return metrics with cost savings on a fully-phased in basis, including return on average tangible common equity in excess of 17% and return on average assets in excess of 1.5%.
- Source: Press Release