Farmers & Merchants Bancorp, a bank holding company headquartered in Lodi, Ca., and Delta National Bancorp, headquartered in Manteca, Ca., announced that a definitive buying agreement has been signed by both parties.
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Delta National Bancorp will merge into Farmers & Merchants Bancorp. The transaction is subject to customary closing conditions, including regulatory approvals and Delta National Bancorp’s shareholder approval.
The Farmers & Merchants Bancorp and Delta National Bancorp Boards of Directors have unanimously approved the transaction, which is expected to close early in the fourth quarter of 2016.
Delta National Bancorp common shareholders will be entitled to receive, in total, 12,074 shares of Farmers & Merchants Bancorp common stock, subject to certain adjustments described in the definitive merger agreement.
Based on the 20 day daily volume weighted average price of Farmers & Merchants Bancorp as of June 6, 2016, the transaction would have a value of $6.6 million, or $17.30 per Delta National Bancorp common share.
However, the deal value for the common shareholders will fluctuate with changes in Farmers & Merchants Bancorp’s stock price. Delta National Bancorp’s preferred shareholders will receive $19.827 per share in cash.
Farmers & Merchants Bancorp expects the acquisition to be immediately accretive to tangible book value and accretive to earnings in 2017, the first full year of combined operations.
Delta National Bancorp will be merged with and into Farmers & Merchants Bancorp and Delta National Bancorp’s banking subsidiary Delta Bank National Association with four full service branches (one branch in San Joaquin County in the city of Manteca and three branches (Riverbank, Modesto, Turlock) located in Stanislaus County), will be merged with and into Farmers & Merchants Bancorp’s banking subsidiary Farmers & Merchants Bank of Central California.
The names of the combined entities will remain Farmers & Merchants Bancorp and Farmers & Merchants Bank of Central California.
As of March 31, 2016, Farmers & Merchants Bancorp on a pro forma consolidated basis with Delta National Bancorp would have had approximately $2.7 billion in total assets, with 28 locations serving California’s Central Valley and East Bay Area regions. ■
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