Farmers National Bank Acquires Cortland Bancorp, Transaction Valued at $124MM
JUN 24, 2021 - 6:14 am
Farmers National Banc Corp., the holding company for Farmers National Bank of Canfield, and Cortland Bancorp, the holding company for Cortland Savings and Banking Company, entered into an agreement and plan of merger.
Pursuant to the agreement, each shareholder of Cortland may elect to receive either $28 per share in cash or 1.75 shares of Farmers’ common stock, subject to an overall limitation of 75% of the shares being exchanged for Farmers shares and 25% for cash. Based on Farmers’ closing share price of $16.87 on June 22, the transaction is valued at approximately $124 million or $29.14 per share. The merger is expected to qualify as a tax-free reorganization for those shareholders electing to receive Farmers’ shares. The transaction is subject to receipt of Cortland shareholder approval and customary regulatory approvals. The transaction is intended to close in Q4/21.
At the close of the transaction, James M. Gasior, president and CEO of Cortland Bancorp, will join Farmers’ executive team as senior executive vice president and corporate development officer. Timothy Carney, executive vice president and COO of Cortland Bancorp, will join Farmers as senior executive vice president and chief banking officer. Furthermore, Farmers intends to name two directors from Cortland’s board of directors to its own board of directors.
“We are thrilled to announce the acquisition of Cortland and to have Jim and Tim join our executive management team,” Kevin J. Helmick, president and CEO of Farmers National Banc Corp., said. “We have known and competed with Cortland for a long time and this acquisition will further solidify our market share in Trumbull and Mahoning Counties as well as expand our presence in the greater Cleveland area, furthering our strategy of building local scale throughout northeast Ohio.”
“The combination with Farmers is a natural one. Our similar cultures and operating philosophies will help us deliver value and liquidity to our shareholders while enhancing the products we can offer our customers,” Gasior said.
“We are excited to join forces with a growing community bank to continue to serve our customers and communities in northeastern Ohio,” Carney said.
Upon consummation of the transaction, Cortland Savings and Banking Company will be merged with and into Farmers National Bank and Cortland’s branches will become branches of Farmers National Bank. Upon closing, Farmers estimates it will have approximately $4.1 billion in assets and 48 locations throughout Ohio and western Pennsylvania.
As of March 31, Cortland had total assets of $791.7 million, which included gross loans of $518.6 million, deposits of $680.3 million and equity of $81.1 million.
Raymond James & Associates is serving as financial advisor and Vorys, Sater, Seymour and Pease is serving as legal counsel to Farmers on the transaction. Piper Sandler is serving as financial advisor and Grady & Associates is serving as legal counsel to Cortland on the transaction.
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