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Friday, December 21, 2018

Citizens Bank and Merchants Bancorp sign agreement | Spotlight - Logan Daily News

LOGAN — The Logan Daily News received information late Thursday afternoon that Merchant Bancorp, Inc. has signed a definitive merger agreement with Citizens Independent Bancorp, Inc. (Citizens Bank) to acquire Citizens Bank in an all-cash transaction.

The agreement was announced in a press release from Citizens Bank President and CEO Dan Fischer. The Logan Daily News has a scheduled interview with Fischer on Friday morning and will be publishing more information as it is received. Be sure to check The Logan Daily News website Friday afternoon for an update on this transaction.

The press release reads as follows:

Merchants Bancorp, Inc. (“Merchants”), the holding company for Merchants National Bank, and Citizens Independent Bancorp, Inc. (“Citizens”), the holding company for Citizens Bank of Logan, announced today that they have signed a definitive merger agreement whereby Merchants will acquire Citizens in an all-cash transaction. Citizens (OTCQX: CZID) operates two branches in Logan, Ohio and one branch in Athens, Ohio. Citizens had approximately $201.1 million in assets, $178.8 million in loans, $178.7 million in deposits and $20.2 million in common equity as of September 30, 2018.

This transaction extends Merchants National Bank’s operations into the attractive markets of Logan and Athens where Merchants’ expanded lending capabilities, complementary products and long history of commitment to its communities will provide exceptional value to the Citizens banking customers. Once finalized, Merchants National Bank will have 18 branches serving ten counties across southern Ohio.

Subject to the terms of the merger agreement, which has been approved by the Board of Directors of each company, Citizens shareholders will receive $47.00 per share in cash for each outstanding common share of Citizens. For all outstanding stock appreciation rights (“SARs”) of Citizens, Merchants will pay in cash the spread between the exercise price of each SAR and the per share merger consideration. Citizens has 687,769 shares outstanding, as well as 46,600 SAR’s with a weighted average exercise price of $25.48. The transaction is valued at $33.3 million, or approximately 160% of Citizens’ tangible book value as of September 30, 2018.

Paul Pence, Chairman and CEO of Merchants and its wholly-owned subsidiary, Merchants National Bank, noted, “We hold Citizens Bank of Logan in high regard, and we are very pleased that the Citizens board has decided to join forces with us.”

Jim Evans, President and COO of Merchants, noted, “While some of the large regional banks are relatively less interested in smaller markets, we view Logan and Athens as key components of our continued growth and profitability. We look forward to the continued delivery of quality community banking services to the Citizens customers.”

Dan Fischer, President and CEO of Citizens, stated, “This transaction gives our shareholders an attractive valuation and the certainty of cash consideration. We also believe that our communities will be served very well by the combined products and resources of our two banks. We are pleased that we will still be part of a community bank, and Merchants is a very strong and well-managed company.”

When the transaction is completed, Merchants will have pro forma consolidated assets of approximately $907 million. Subject to customary regulatory approvals, Citizens shareholder approvals and other conditions set forth in the definitive merger agreement, the transaction is anticipated to close in the second quarter of 2019. At that time, Citizens Bank of Logan branches will become branches of Merchants National Bank.

Merchants expects to have a very high retention rate with respect to Citizens employees, and Dan Fischer will join Merchants as Area President and a member of the senior management team.

Merchants is being advised by Boenning & Scattergood, Inc. and Shumaker, Loop & Kendrick, LLP. Citizens is being advised by Sandler O'Neill + Partners, L.P. and Vorys, Sater, Seymour and Pease LLP.



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