- Acquisition will add $301 million in
deposits and $298 million in loans
- First Defiance will enhance and
expand presence in northwest and north central Ohio
- Transaction is expected to close in
the first quarter of 2017
First Defiance Financial Corp. (the “Company” or “First
Defiance”) (NASDAQ: FDEF) and Commercial Bancshares, Inc.
(“Commercial”) (OTCQX: CMOH) jointly announced today the signing of
a definitive merger agreement under which First Defiance will
acquire Commercial in a transaction valued at $51.00 per share,
based on the 20-day average closing price of First Defiance common
stock of $43.19 ending August 22, 2016. Upon completion,
Commercial’s wholly owned subsidiary, Commercial Savings Bank, will
merge into First Defiance’s subsidiary bank, First Federal Bank of
the Midwest.
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Commercial Savings Bank is a community bank founded in 1920 and
operates seven full-service banking locations. As of June 30, 2016,
Commercial had $342 million in assets, $298 million in loans and
$301 million in deposits. Upon completion of the acquisition, the
combined organization is expected to have approximately $2.8
billion in assets, and the transaction will enhance and expand
First Defiance’s presence in northwestern and north central
Ohio.
“Commercial is a high-quality bank with an established customer
base, a strong balance sheet and similar core values. This
combination will be an excellent fit culturally,” said Donald P.
Hileman, President and Chief Executive Officer of First Defiance.
“In addition, this merger provides an extension of our growing
market area. We are excited to serve Commercial’s customers with
additional products and services and look forward to growing in
Commercial's communities.”
Robert E. Beach, President and Chief Executive Officer of
Commercial, stated, “We are pleased with the opportunity to partner
with a company that has a culture and attitude towards customers
similar to our own. First Federal has a long-standing tradition of
community involvement and a philosophy of true community banking,
which means local decision making, commitment to community and
personalized customer service.”
The acquisition is expected to close in the first quarter of
2017 and is subject to Commercial shareholder approval, regulatory
approval, and other conditions set forth in the merger agreement.
Pursuant to the terms of the merger agreement, which has been
unanimously approved by the Board of Directors of both companies,
Commercial common shareholders will have the opportunity to elect
to receive 1.1808 shares of First Defiance common stock or cash in
the amount of $51.00 per share, subject to adjustment as provided
for in the merger agreement. Total consideration for Commercial’s
common shares outstanding will consist of 80% First Defiance stock
and 20% cash, and the aggregate transaction value of $63.0 million
(based on the 20-day average closing price of First Defiance common
stock of $43.19 ending August 22, 2016) includes an additional cash
payment of approximately $1.5 million to cancel outstanding stock
options. The transaction, after one-time costs, is expected to be
immediately accretive to earnings, with a tangible book value
earn-back of approximately 2 years. First Defiance will add one
current director of Commercial Bancshares to the Board of First
Defiance upon the effective date of the transaction.
First Defiance Financial Corp. was advised by the investment
banking firm of Raymond James & Associates, Inc., and the law
firm of Vorys, Sater, Seymour and Pease LLP. Commercial Bancshares,
Inc. was advised by the investment banking firm of Keefe, Bruyette
and Woods, a Stifel company, and the law firm of Shumaker, Loop
& Kendrick, LLP.
Important Information for Investors and
Shareholders
This news release does not constitute an offer to sell or the
solicitation of an offer to buy securities of First Defiance.
First Defiance will file a registration statement on Form S-4
and other documents regarding the proposed transaction referenced
in this news release with the Securities and Exchange Commission
(“SEC”) to register the shares of First Defiance's common shares to
be issued to the shareholders of Commercial. The registration
statement will include a proxy statement/prospectus, which will be
sent to the shareholders of Commercial in advance of its special
meeting of shareholders to be held to consider the proposed
merger. Investors and security holders are urged to read the
proxy statement/prospectus and any other relevant documents to be
filed with the SEC in connection with the proposed transaction
because they contain important information about First Defiance,
Commercial and the proposed transaction. Investors and security
holders may obtain a free copy of these documents (when available)
through the website maintained by the SEC at
www.sec.gov. These documents may also be obtained,
without charge, by directing a request to First Defiance Financial
Corp., 601 Clinton Street, Defiance, Ohio 43512, Attn.: Investor
Relations , or by accessing First Defiance’s Internet site
(http://www.fdef.com/docs).
First Defiance and Commercial and certain of their directors
and executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of Commercial in
connection with the proposed merger. Information about the
directors and executive officers of First Defiance is set forth in
the proxy statement for First Defiance's 2016 annual meeting of
shareholders, as filed with the SEC on Schedule 14A on March 10,
2016. Information about the directors and executive officers of
Commercial is set forth in the proxy statement for Commercial’s
2016 annual meeting of shareholders, as filed with the SEC on a
Schedule 14A on April 7, 2016. Additional information regarding the
interests of those participants and other persons who may be deemed
participants in the transaction may be obtained by reading the
proxy statement/prospectus regarding the proposed merger when it
becomes available. Free copies of this document may be obtained as
described in the preceding paragraph.
About First Defiance Financial Corp.
First Defiance Financial Corp., headquartered in Defiance, Ohio,
is the holding company for First Federal Bank of the Midwest and
First Insurance Group. First Federal Bank operates 34 full-service
branches and numerous ATM locations in northwest Ohio, southeast
Michigan and northeast Indiana and a loan production office in
Columbus, Ohio. First Insurance Group is a full-service insurance
agency with six offices throughout northwest Ohio. For more
information, visit the company’s Web site at www.fdef.com.
About Commercial Bancshares, Inc.
Commercial Bancshares, Inc, headquartered in Upper Sandusky,
Ohio is the bank holding company for Commercial Savings Bank and
Commercial Financial and Insurance Agency, LTD. Commercial Saving
Bank operates 7 full service branches and a loan production office
in Worthington, Ohio.
Safe Harbor Statement
This news release may contain certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21B of the
Securities Exchange Act of 1934, as amended, which are intended to
be safe harbors created thereby. Those statements may include, but
are not limited to, all statements regarding intent, beliefs,
expectations, projections, forecasts and plans of First Defiance
Financial Corp. and its management. These forward-looking
statements involve numerous risks and uncertainties, including a
failure to satisfy the conditions to closing for the merger in a
timely manner or at all; failure of the Commercial shareholders to
approve the merger; failure to obtain the necessary regulatory
approvals or the imposition of adverse regulatory conditions in
connection with such approvals; the successful completion and
integration of the transaction contemplated in this release; the
retention of the acquired customer relationships; disruption to the
parties' businesses as a result of the announcement and pendency of
the transaction; adverse changes in economic conditions; the impact
of competitive products and prices; and the other risks set forth
in filings with the Securities and Exchange Commission ("SEC"),
including our Annual Report on Form 10-K for the year ended
December 31, 2015. One or more of these factors have affected or
could in the future affect First Defiance's business and financial
results in future periods and could cause actual results to differ
materially from plans and projections. Therefore, there can be no
assurances that the forward-looking statements included in this
news release will prove to be accurate. In light of the significant
uncertainties in the forward-looking statements included herein,
the inclusion of such information should not be regarded as a
representation by First Defiance or any other persons, that our
objectives and plans will be achieved. All forward-looking
statements made in this news release are based on information
presently available to the management of First Defiance. We assume
no obligation to update any forward-looking statements.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160823006327/en/
First Defiance Financial Corp.Donald P.
Hileman, 419-782-5104President and
CEOdhileman@first-fed.comorCommercial Bancshares, Inc.Robert E.
Beach, 419-294-5781President and CEOrobert.beach@csbanking.com
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