Note 3 - Acquisition Activity

 

On February 20, 2018, the Bancorp entered into an Agreement and Plan of Merger (the “Merger Agreement”) with First Personal Financial Corp., a Delaware corporation (“First Personal”). Pursuant to the Merger Agreement, First Personal will merge with and into the Bancorp, with the Bancorp as the surviving corporation (the “Merger”). At the time of the Merger, First Personal Bank, an Illinois state chartered commercial bank and wholly-owned subsidiary of First Personal (“First Personal Bank”), will merge with and into Peoples Bank SB, the wholly-owned Indiana state chartered savings bank subsidiary of the Bancorp (“Peoples Bank”), with Peoples Bank as the surviving bank.

 

The boards of directors of the Bancorp and First Personal have approved the Merger and the Merger Agreement. Subject to the approval of the Merger by First Personal’s stockholders, regulatory approvals, and other customary closing conditions, the parties anticipate completing the Merger in the third quarter of 2018.

 

Upon completion of the Merger, each First Personal stockholder will have the right to receive fixed consideration of (i) 0.1246 shares of Bancorp common stock, and (ii) $6.67 per share in cash for each share of First Personal’s common stock. Stockholders holding less than 100 shares of First Personal common stock will have the right to receive $12.12 in cash and no stock consideration for each share of First Personal common stock. Based on the Bancorp’s closing stock price of $42.80 as of February 20, 2018, the transaction has an implied valuation of approximately $15.60 million.

 

Subject to certain terms and conditions, the board of directors of First Personal has agreed to recommend the approval and adoption of the Merger Agreement to First Personal’s stockholders and will solicit proxies to vote in favor of the Merger from First Personal’s stockholders. The Merger Agreement also provides for certain termination rights for both the Bancorp and First Personal, and further provides that upon termination of the Merger Agreement under certain circumstances, First Personal will be obligated to pay the Bancorp a termination fee.

First Personal Bank has a home office and two branch offices in Cook County, Illinois. As of December 31, 2017, First Personal Bank reported total assets of $145.8 million, total loans of $99.9 million, and total deposits of $130.1 million. The combined bank is expected to have approximately $1.1 billion in assets, $742.3 million in total loans, and $945.9 million in deposits. The acquisition will expand the Bank’s banking center network into Cook County Illinois.