Urbana savings bank to be acquired for over $100M

Credit: Bill Lackey

Credit: Bill Lackey

An Urbana savings bank that has been in the community for over 140 years will be acquired by an Ohio-based consumer lending company by the end of the year.

The Perpetual Federal Savings Bank in Urbana is expected to be acquired by Farmers & Merchants Bancorp, Inc., by the end of September in a stock and cash transaction worth over a $100 million.

The planned acquisition was announced by Farmers & Merchants this month and Perpetual’s presence in the area is expected to stay the same, with added services for customers.

The savings bank operates one full-service office in Urbana and had $391 million in total assets as of March. Perpetual largely focuses on mortgage lending and providing competitive rates on certificate of deposits, said the bank’s president and CEO Michael Melvin.

Melvin said he will be stepping aside from his position following the acquisition.

The bank does offer other basic services such as checking and savings accounts as well as provide lending services.

However, the acquisition is expected to add options for customers that are considered the staples of modern banking such as online banking, ATM machines as well as credit card services, Melvin said.

By the end of the year, Farmers & Merchants is expected to operate 19 offices in Ohio and 12 offices in Indiana with total assets of $2.5 billion, according to a news release from the consumer lending company.

“This transaction is an excellent opportunity for (Perpetual) to become part of a larger community banking organization that offers customers a wider range of financial services,” said Lars Eller, president and CEO of Farmers & Merchants.

As a result of the agreement, existing shareholders of Perpetual will be able to receive either 1.7766 shares of Famers & Merchants stock or $41.20 per share in cash for each Perpetual share owned.

That is subject to adjustment based upon 1,833,999 shares of Farmers & Merchant to be issued in the merger, the release added.

“With a shared community oriented culture, ( Famers & Merchants’) scale, diversity, and expertise enhances our service offerings. ( Famers & Merchants) has a history of completing successful acquisitions and provides (Perpetual) with the necessary resources to pursue compelling growth opportunities throughout our markets,” Melvin said.

By the numbers

$103.7 million - proposed transaction for Farmers & Merchants to acquire Perpetual Federal Savings Bank of Urbana

$41.20 - what perpetual shareholders could get per share as a result of the acquisition

19 - number of offices Farmers & Merchants will have in Ohio after the acquisition

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