Springfield First Neighborhood Financial institution & Warranty Financial institution announce a merger

SPRINGFIELD, Mo. (Edited Information Launch/KY3) – QCR Holdings, Inc. and Warranty Federal Bancshares, Inc. (“Warranty”) collectively introduced Tuesday the signing of a definitive settlement whereby QCR Holdings will purchase Warranty and merge Warranty Financial institution, the banking subsidiary of Warranty into Springfield First Neighborhood Financial institution (“SFC Financial institution”), QCR Holdings’ Springfield-based constitution.

The mixed financial institution will function underneath the Warranty Financial institution identify in all Springfield and southwest Missouri markets.

“Springfield and neighboring Southwest Missouri markets make up a vibrant area the place robust relationships with our shoppers matter. Warranty Financial institution strongly aligns with our tradition and our dedication to shopper service,” stated Larry Helling, QCR Holdings Chief Government Officer. “Enhancing our market share on this area helps our strategic targets and allows us to increase our high-performing and worthwhile area of interest enterprise strains benefiting shoppers and shareholders alike.”

Established in 1913, Warranty Financial institution at the moment has 16 banking areas in Springfield, Joplin, Carthage, Ozark, Nixa and Neosho, Missouri, which can increase and complement QCR Holdings’ presence in and dedication to the area. Warranty reported roughly $1.2 billion in belongings and $1.0 billion in deposits as of September 30, 2021.

As of September 30, 2021, the mixed financial institution would have roughly $2.0 billion in whole belongings, $1.5 billion in whole loans, and $1.6 billion in whole deposits. As well as, the mixed financial institution would rank #4 in deposit market share within the Springfield market as of June 30, 2021. Consolidated professional forma whole belongings as of September 30, 2021, can be $7.2 billion, whereas consolidated professional forma loans and deposits can be $5.4 billion and $5.9 billion, respectively.

“Our M&A technique has all the time been about discovering the precise companions in the precise markets that share our core values and enterprise technique,” stated Todd A. Gipple, President, Chief Working Officer, and Chief Monetary Officer of QCR Holdings. “The mixing of expertise and experience from each SFC Financial institution and Warranty Financial institution, and the elevated product and repair capabilities of the mixed financial institution, will end in continued robust progress in Springfield and surrounding communities. We’re very excited concerning the alternatives this merger gives.”

Upon completion of the merger, SFC Financial institution President and CEO Monte McNew will function CEO of the mixed financial institution, whereas Warranty Financial institution President and CEO Shaun Burke will function President.

“We’re delighted to be becoming a member of forces with Warranty Financial institution to serve our shoppers and our communities,” McNew stated. “This partnership positions us to change into the preeminent financial institution on this market. We stay up for demonstrating the worth of this merger to all of our stakeholders by exhibiting how we’re higher collectively.”

“Warranty Financial institution has been proud to serve our communities for greater than a century,” Burke stated. “Becoming a member of the QCR Holdings household and the crew at SFC Financial institution is an thrilling alternative for us to increase our product and repair choices whereas persevering with our monitor document of delivering distinctive shopper service.”

Merger Highlights:

  • Elevated Market ShareCombined market share at #4 with $1.4 billion in deposits, based mostly on information as of June 30, 2021, and the chance for continued progress. Retaining native constitution autonomy will create the second-largest locally-managed financial institution in the neighborhood.
  • Accelerated Development OpportunitiesExpansion of QCR Holdings’ area of interest services to new shoppers gives an distinctive alternative within the engaging Springfield market. The merger will create essential scale and capabilities for a a lot bigger group.
  • Enticing EconomicsStrong QCR Holdings’ EPS accretion of roughly 13% anticipated within the first full 12 months, 2.75-year tangible guide worth per share earn again interval, and accretive to an already robust ROAA.

Phrases of the Transaction Underneath the phrases of the merger settlement, which has been unanimously accepted by the boards of administrators of each corporations, stockholders of Warranty could have the precise to obtain for every share of Warranty frequent inventory owned, on the election of every stockholder, and topic to proration, (i) $30.50 in money, (ii) 0.58775 shares of QCR Holdings frequent inventory, or (iii) combined consideration of $6.10 in money and 0.4702 shares of QCR Holdings frequent inventory, with whole consideration to consist of roughly 80% inventory and 20% money. Based mostly upon the $59.99 closing value of QCR Holdings frequent inventory as of November 5, 2021, the transaction is valued at roughly $152 million. The transaction is topic to regulatory approvals, approval by Warranty’s stockholders and sure customary closing situations. The transaction is predicted to shut within the first or second quarter of 2022.

Excluding one-time merger-related bills, QCR Holdings expects the transaction to be roughly 13% accretive to earnings per share in 2023, the primary full 12 months of mixed operations. QCR Holdings additionally expects to incur tangible guide worth per share dilution of roughly 5% upon closing of the transaction, with a tangible guide worth per share dilution earn again interval of roughly 2.75 years.

AdvisorsPiper Sandler & Co. served as monetary advisor and offered a equity opinion to QCR Holdings and Barack Ferrazzano Kirschbaum & Nagelberg LLP served as authorized counsel.

Keefe, Bruyette & Woods, Inc. served as monetary advisor and offered a equity opinion to Warranty Bancshares and Sidley Austin, LLP served as authorized counsel.

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