Capitol Federal Financial Closes Acquisition of Capital City Bancshares of Kansas.
7 September 2018 - Kansas, US-based bank holding companies Capitol Federal Financial, Inc. (NASDAQ: CFFN) and Capital City Bancshares, Inc have closed agreement and plan of merger pursuant to which CCB merged with and into Capitol Federal, the companies said.
Immediately upon closing the merger, Capital City Bank merged with and into Capitol Federal Savings.
As of March 31, 2018 and excluding purchase accounting, the combined company would have had pro-forma total assets of USD 9.5bn, gross loans of USD 7.5bn, deposits of USD 5.7bn and an equity position of approximately USD1.4 bn.
With the acquisition of Capital City Bank, Capitol Federal Savings will enter the commercial banking business, through the origination of commercial lending products and offering of commercial deposit services, for the first time in its 125 year history.
While Capitol Federal Savings has built a small portfolio of mostly commercial real estate loan participations through its network of correspondent banks over the course of the last five years (which portfolio totaled approximately USD 462m in gross loans as of March 31, 2018), this merger with Capital City will enable the company to offer a full range of commercial lending and deposit products and services.
CCB, a commercial bank holding company with USD 434.1m in total assets as of March 31, 2018, owns Capital City Bank, with locations in Topeka, Lawrence and Overland Park. Capital City Bank offers commercial, personal, trust, and brokerage products and services.
Established in 1892 in Richland, KS and relocated to Topeka in 1964, Capital City Bank has a strong history of community support through charitable, educational and non-profit donations. These characteristics, among others, make CCB a great fit with Capitol Federal.
Subject to the terms of the merger agreement, CCB stockholders will receive 3.725 shares of Capitol Federal's common stock for each of the outstanding shares of their common stock.
Based on this fixed exchange ratio, Capitol Federal will issue approximately 3m shares of its common stock, representing approximately 2.1% of pro forma shares following the merger.
Based on Capitol Federal's closing price of USD 12.64 as of April 27, 2018, this represents a value of USD 47.08 per CCB common share, and an aggregate deal value of USD 37.5m.
This equates to a price to CCB tangible book value as of March 31, 2018 of 141% and a premium to CCB's core deposits of 3.2% as of March 31, 2018.
Capitol Federal is the holding company for Capitol Federal Savings. Capitol Federal Savings has 47 branch locations in Kansas and Missouri, and is one of the largest residential lenders in the State of Kansas.
Sandler O'Neill and Partners, L.P. served as financial advisor and Silver, Freedman, Taff and Tiernan LLP served as legal counsel to Capitol Federal in the transaction. The Capital Corp. served as financial advisor and Stinson Leonard Street LLP served as legal counsel to CCB in the transaction.
Sector: Banking/Financial Services
Target: Capital City Bancshares
Buyer: Capitol Federal Financial
Deal size in USD: 37.5m
Type: Corporate Acquisition
Buyer advisor: Sandler O'Neill and Partners , Silver, Freedman, Taff and Tiernan ,
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|Publication:||M & A Navigator|
|Date:||Sep 7, 2018|
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