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Merchants Bancorp’s Joy State Bank To Acquire Farmers-Merchants National Bank of Paxton

CARMEL, Ind. and PAXTON, Ill- Merchants Bancorp, Carmel, IN (“Merchants”; NASDAQ: MBIN) and its subsidiary, Joy State Bank, Joy, IL (“Joy”), along with FM Bancorp Inc., Paxton, IL (“FM Bancorp”), announced today they have entered into an agreement and plan of merger whereby FM Bancorp and its subsidiary, Farmers-Merchants National Bank of Paxton (“Farmers-Merchants”), will merge with and into Merchants and Joy, respectively (the “Agreement”).  .

Michael F. Petrie, Chairman and CEO of Merchants stated, “We are pleased to add to our Illinois banking operations with the acquisition of FM Bancorp.  We believe that Tom McCabe and his colleagues have done a great job in building a solid community bank, and we believe that this transaction will be helpful to the employees and customers of Farmers-Merchants.”

Tom McCabe, Chairman and President of FM Bancorp, stated, “We are very happy to be joining an organization of this caliber.  Merchants has had extremely strong financial performance in recent years, and it will benefit our employees and customers to be part of a larger community bank offering a broader selection of products and services.  We also believe that Merchants is very happy serving relatively smaller communities, and we will remain strongly committed to the consumers and small businesses (including farmers) in our markets.”

Merchants expects the transaction to close in the fourth quarter of 2018.  The transaction is subject to customary closing conditions, including regulatory approvals and the approval of FM Bancorp’s shareholders.

Merchants estimates that, following the closing, Joy will have approximately $159 million in assets and five banking locations throughout Illinois.  Merchants expects the transaction to be accretive to earnings per share excluding one-time merger costs beginning in the first full year of combined operations.  Following consummation of the transaction, it is expected that Joy will exceed “well-capitalized” thresholds under all regulatory definitions.

As of March 31, 2018, FM Bancorp had total assets of $114.6 million, which included gross loans of $33.6 million and deposits of $99.3 million.  For the last twelve months ended March 31, 2018, FM Bancorp’s return on average assets and return on average equity were 0.87% and 6.85%, respectively.

Boenning& Scattergood, Inc. is serving as financial advisor to Merchants while Krieg DeVault LLP is serving as legal counsel on the transaction.  Performance Trust Capital Partners, LLC and Howard & Howard Attorneys PLLC are serving as financial and legal advisors to FM Bancorp, respectively.


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