CrossFirst Bankshares, Inc. and Central Bancorp, Inc announced that they have entered into a definitive merger agreement under which CrossFirst bank subsidiary, CrossFirst Bank (“CFB Bank”), will acquire Central’s bank subsidiary, Farmers & Stockmens Bank (“F&S Bank”), in an all-cash transaction. F&S Bank currently has Central Bank & Trust branches in Denver and Colorado Springs and Farmers & Stockmens Bank branches in New Mexico. Central will retain its wealth management subsidiaries, The Corundum Group and Corundum Trust Company.
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The combination will bring together complementary banking platforms with management teams that share a commitment to the clients and businesses they serve. When completed, the transaction is expected to widen the scope of the CrossFirst franchise, providing an enlarged footprint with further expansion opportunities in the Colorado and New Mexico markets. Based on current estimates, the combined company will have approximately $6.2 billion in assets, $4.9 billion in loans and $5.3 billion in deposits, with banking locations in Kansas, Oklahoma, Texas, Missouri, Colorado, New Mexico and Arizona.
CrossFirst believes that providing F&S Bank and its clients with access to CFB Bank’s broader array of banking offerings, larger capabilities, and focus on technology will spur the overall growth of the F&S Bank platform and provide enhanced benefits for clients. CrossFirst expects that in addition to providing access to dynamic target markets, the acquisition will further diversify its revenue streams and add additional liquidity for growth. Specifically, CrossFirst plans to incorporate both F&S Bank’s SBA and agricultural lending capabilities into its current platform, while also bolstering its private banking business, a fundamental aspect of both companies’ offerings.
“We are thrilled to welcome Farmers & Stockmens and Central Bank & Trust clients and employees to our CrossFirst team,” commented Mike Maddox, CrossFirst’s President and Chief Executive Officer. “This transaction represents an exciting milestone for our company, allowing us to enter new, dynamic markets, and expand our capabilities by partnering with an impressive team of bankers. We have tremendous respect for the Farmers & Stockmens and Central Bank & Trust management teams and are confident this combination will create extraordinary value for our stockholders, our clients, our employees, and our communities.”
Scott Page, F&S Bank’s Chief Executive Officer, added, “We are delighted to join a bank that shares our cultural values and commitment to its clients as we embark on this next chapter for Farmers & Stockmens Bank. We have built a successful and differentiated franchise in our local communities, and this combination will provide our clients with the full breadth of CrossFirst’s comprehensive set of products, services and systems.”
Under the terms of the merger agreement, F&S shareholders are expected to receive approximately $75.0 million in aggregate merger consideration in cash at closing.
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The transaction is currently expected to be $0.17, or 11.7%, accretive to CrossFirst’s earnings per share in 2023, assuming fully phased in cost savings. The earnings per share accretion estimates are based on anticipated cost savings of 20% of F&S Bank’s non-interest expense and do not include any impact due to potential revenue synergies, although opportunities have been identified.
The agreement was unanimously approved by the Board of Directors of each company and bank. The transaction is expected to close in the second half of 2022, subject to approval by Central shareholders and bank regulatory authorities, as well as the satisfaction of other customary closing conditions. The parties have entered into a voting agreement with certain F&S Bank and Central directors and executive officers whereby they have agreed to vote in favor of the transaction in their capacity as shareholders.
CrossFirst was advised in this transaction by Keefe, Bruyette & Woods, A Stifel Company as financial advisor and Stinson LLP as legal counsel. Central was advised by Piper Sandler & Co. as financial advisor and Otteson Shapiro LLP as legal counsel.
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