United Bancorp to acquire Powhatan Point Community Bancshares in $6.8M deal
United Bancorp and Powhatan Point Community Bancshares announce that they have signed a definitive merger agreement whereby United will acquire Powhatan in a stock and cash transaction. Upon completion, First National will be merged into UBCP's wholly-owned subsidiary bank, Unified Bank. At that time, the main office of First National will become a full-service branch of Unified Bank. Powhatan operates one full-service office in Belmont County, Ohio and has approximately $59M in assets, $7.9M in loans, $53.6M of deposits and $5.2M in consolidated equity as of March 31, 2018. The transaction significantly increases UBCP's presence in Belmont County improving the pro forma deposit market share to 15.9%. The acquisition is expected to close in the fourth quarter of 2018 and is subject to Powhatan shareholder approval, regulatory approval, and other conditions set forth in the merger agreement. Subject to the terms of the merger agreement, which has been unanimously approved by the Board of Directors of each company, Powhatan shareholders will receive 6.9233 shares of UBCP common stock plus $38.75 in cash for each outstanding share of Powhatan common stock, subject to adjustment based on closing equity and other factors. Based on the UBCP closing share price of $13.05 on June 13, 2018, the transaction is valued at $129.10 for each Powhatan share or approximately $6.836M in aggregate. Excluding one-time transaction costs, and with fully-phased in synergies, UBCP expects the transaction to be approximately 7% accretive to fully diluted earnings per share. Tangible book value per share dilution earnback will be approximately 2.2 years using the crossover method. These estimates include fully-phased in cost savings of 21%. In addition, UBCP will restructure Powhatan's investment portfolio with an expected 1.05% yield improvement.