CHARLESTON, W.Va. & ASHLAND, Ky. & CYNTHIANA, Ky.--(BUSINESS WIRE)--City Holding Company (Nasdaq: CHCO), the parent company of City National Bank of West Virginia, announced today the concurrent signing of two separate definitive merger agreements. Under one agreement, City will acquire Poage Bankshares, Inc., (Nasdaq: PBSK), the parent company of Town Square Bank, Ashland, Kentucky; under the other agreement, City will acquire Farmers Deposit Bancorp, Inc. (“Farmers Deposit”), the parent company of Farmers Deposit Bank, Cynthiana, Kentucky. Upon completion of the Poage merger, the subsidiary bank of Poage and will merge into City National Bank of West Virginia. Upon completion of the Farmers Deposit merger, the subsidiary bank of Farmers Deposit and will merge into City National Bank of West Virginia.
Based upon financial data as of March 31, 2018, the combined company will have $4.8 billion in assets, deposits of $3.9 billion, and gross loans of $3.5 billion, bolstering City’s presence in the Huntington-Ashland and Lexington, Kentucky MSAs. “Our leadership recognized these partnerships as strategic next steps for enhancing our market presence throughout Kentucky and we are fortunate to be making this move forward,” remarked Charles R. (Skip) Hageboeck, President & Chief Executive Officer of City. Both the Poage and Farmers Deposit merger are expected to close in the fourth quarter of 2018, pending customary closing conditions, including receipt of required regulatory approvals and the approval by the shareholders of Poage and Farmers Deposit.
Subject to the terms of the Poage merger agreement, Poage shareholders will receive 0.335 shares of City common stock for each outstanding share of Poage common stock. Based on City’s 5-day average closing price of $78.43 as of July 10, 2018, this equates to a per share value of $26.27 and an aggregate deal value of $93.5 million. Upon completion of the merger, Bruce VanHorn, President, Chief Executive Officer & Director of Poage, will enter into an employment agreement with City. Mr. VanHorn stated, “Joining City is a defining moment for our company, shareholders and customers. Our shared experience in operating in overlapping markets makes me confident that this will be a seamless transition for our employees and customer base while providing long-term value for our shareholders. City is a great franchise, and I look forward to the years ahead for our combined company.”
Subject to the terms of the Farmers Deposit merger agreement, Farmers Deposit shareholders will receive $24.9 million in cash for all outstanding shares of Farmers Deposit common stock. “This merger with City is an excellent opportunity for our organization to become part of a successful and established institution,” said W. Brent Hoptry, Chairman, President, & Chief Executive Officer of Farmers Deposit. “With our combined markets and leadership, we will continue to provide high-quality banking solutions for our communities and remain well positioned for the future.”
Each of the Poage and Farmers Deposit merger agreements have been unanimously approved by the City board of directors. The Poage board of directors has unanimously approved the Poage merger agreement, and the Farmers Deposit board of directors has unanimously approved the Farmers Deposit agreement. Neither the Poage transaction nor the Farmers Deposit transaction is conditional upon the other.
Keefe, Bruyette & Woods, Inc. served as financial advisor and Dinsmore & Shohl LLP served as legal counsel to City in both transactions. Sandler O’Neill & Partners served as financial advisor and Luse Gorman, PC served as legal counsel to Poage in the Poage transaction. ProBank Austin served as financial advisor and Stites & Harbison, PLLC served as legal counsel to Farmers Deposit in the Farmers Deposit transaction.
About City Holding Company
City Holding Company, headquartered in Charleston, West Virginia is a financial holding company which owns City National Bank of West Virginia. City provides a full range of consumer and commercial banking services to individuals, businesses and industries through its 86 branches across West Virginia, Virginia, Kentucky and Ohio. As of March 31, 2018, City had $4.2 billion in total assets, $3.4 billion in deposits, and $3.1 billion in gross loans. For additional information, locations, and hours of operation, please visit www.bankatcity.com.
About Poage Bankshares, Inc.
Poage Bankshares, Inc., headquartered in Ashland, Kentucky, is the parent company of Town Square Bank, which was founded as a savings and loan association in 1889. Poage operates nine branches and one loan production office across northeastern Kentucky. As of March 31, 2018, Poage had $450 million in total assets, $375 million in deposits, and $333 million in gross loans. For additional formation on Poage Bankshares, Inc. and Town Square Bank, please visit www.townsquarebank.com.
About Farmers Deposit Bancorp, Inc.
Farmers Deposit Bancorp, Inc., headquartered in Cynthiana, Kentucky, is the parent company of Farmers Deposit Bank, which was founded as a full service bank in 1866. Farmers Deposit operates 3 branches around the Lexington, Kentucky market. As of March 31, 2018, Farmers Deposit had $122 million in total assets, $98 million in deposits, and $60 million in gross loans. For additional formation on Farmers Deposit Bankshares, Inc. and Farmers Deposit Bank, please visit www.farmersdepositbankky.com.
