Nicolet Bankshares (NCBS) to acquire County Bancorp (ICBK)
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Nicolet Bankshares, Inc. (NASDAQ: NCBS) (“Nicolet”) and County Bancorp, Inc., (NASDAQ: ICBK) (“County”) today jointly announced the signing of a definitive merger agreement pursuant to which Nicolet will acquire County and its wholly owned banking subsidiary, Investors Community Bank (“Investors”).
Based on financial results as at March 31, 2021, the combined company will have pro forma total assets of $ 7.5 billion, deposits of $ 6.3 billion and loans of $ 4.9 billion, including the announcement of the pre-acquisition of Mackinac Financial Corporation by Nicolet on April 12, 2021.
Mike Daniels, President and CEO of Nicolet, said, “We are excited about the potential to combine Nicolet and investors to serve our clients and our communities. Our collective founding and entrepreneurial mindset creates a distinctive culture that resonates with our employees and customers.
One of the goals of every acquisition is to find better ways to serve communities. This partnership is an intentional strategic initiative to become the premier agricultural lender in all of Wisconsin. We’re excited to add the expertise and specialist knowledge of the Investor Banking team, who like our current farm lenders have their boots in the aisle. In the long term, the combination of our operations will create a stronger community bank. “
Tim Schneider, County President, said, “Nicolet is a like-minded partner who shares our focus on people, community and customer service. With Nicolet’s additional scale and capital, this partnership will quickly accelerate our ability to serve existing clients. customers and build new relationships. I am very optimistic about the direction we can take as a combined company. Our similar cultures and values should lead to a smooth transition for our employees and customers. We remain committed to the markets and industries we serve, especially the dairy sector, and most importantly, keeping the local bank. “
Bob Atwell, President of Nicolet, said: “While some may see this as just a market-filling deal that diversifies our loan income, we think it is more accurate to say that this transaction better aligns our portfolio of loans with the economic structure of our region. Agricultural production loans have long been underweight our overall loan portfolio precisely because investors have been so good at this central area of agricultural lending. “
Andy Steimle, County President, said: “This merger will create many exciting opportunities for the combined organization by extending banking services to all customers. In Nicolet, we have found a strategic partner with a common vision and a long history of supporting clients and communities. This is a transformational partnership for County that provides the scale and resources necessary to grow shareholder value over the long term. “
Under the merger agreement, Nicolet will acquire County, with Nicolet being the surviving company. In connection with the merger, the county shareholders are entitled to receive for each county common share, at the option of each holder and on a pro rata basis, either $ 37.18 per county common share share, or 0.48 common share of Nicolet. County shareholder elections will be prorated to ensure the total consideration will consist of approximately 20% cash and approximately 80% of Nicolet common stock. Based on Nicolet’s closing price of $ 71.75 as of June 21, 2021, the merger consideration is valued at approximately $ 219 million.
The estimated transaction value is a multiple of 1.38 of the county’s tangible book value as of March 31, 2021 and is equivalent to approximately 16.6 times the county’s estimated earnings per share in 2021. The increase in the county’s earnings per share in 2021 first full year (2022) is estimated in the average of the numbers and the tangible book value by dilution of 1.2% is expected to be recovered in approximately 1.4 years under the crossover method, including the current expected credit loss (CECL ) “Day 2” accounting treatment. Additional assumptions and metrics can be found in the accompanying Investor Presentation.
Nicolet will appoint a member of the current county board of directors to the boards of directors of Nicolet and Banque Nationale Nicolet once the transaction is completed.
Management / employee information
Following the merger, Tim Schneider will join the Nicolet management team as Senior Vice President, Director of Agricultural Lending.
Approvals and closing date
The transaction was unanimously approved by the boards of directors of both companies. It is subject to county and Nicolet shareholder approval, regulatory approvals and other customary closing conditions and is expected to close in the fourth quarter of 2021. Upon closing, the investors’ existing branch at 960 Hansen Rd., Green Bay, WI is scheduled to close and consolidate with continued service from the former Nicolet office at 2363 Holmgren Way, Green Bay, WI. All other branches of Investors should become branches of Nicolet.
Keefe, Bruyette & Woods, A Stifel company acted as financial advisor and provided a fairness opinion to the board of directors of Nicolet, and Bryan Cave Leighton Paisner LLP acted as legal counsel to Nicolet in this transaction. Stephens Inc. acted as financial advisor and provided a fairness opinion to the County Board of Directors, and Barack Ferrazzano Kirschbaum & Nagelberg LLP acted as County legal counsel.
Conference call and investor presentation
Nicolet and the county will hold a joint conference call at 3:00 p.m. Central Time on June 22, 2021 to discuss the transaction and related matters. The corresponding slide show is available on the Nicolet website at the address bank nicole.com under “Investor Relations”. Interested parties can listen to the call live via webcast by visiting bank nicole.com and by clicking on the Investor Relations link. Investment professionals are invited to call the toll-free number: 1-866-652-5200. The webcast will be archived on Nicolet’s website for 90 days and will be available shortly after the call.