LCNB to Buy First Capital in Ohio

LCNB (LCNB) in Lebanon, Ohio, would expand into two new counties with its agreement to buy First Capital Bancshares in Chillicothe, Ohio, for roughly $19.6 million in stock and cash.

LCNB National Bank currently has 25 branches in southwestern Ohio and more than $800 million of assets. With the deal, LCNB would expand into Ross and Fayette counties, which are adjacent to the markets it currently serves.

Citizens National Bank of Chillicothe has six branches and assets of $152 million. The combined company would have roughly $985 million of assets, $850 million of deposits and 31 branches.

Under the agreement, First Capital shareholders may choose among $30.76 in cash, shares of LCNB common stock or a combination of the two for each First Capital common stock that they own. For the stock portion, the exchange ratio would be based on the average closing price of LCNB's common stock during the 25-trading day period before completion of the deal. LCNB would pay in stock for between 50% and 60% of the deal.

The deal is expected to qualify as a tax-free reorganization. Excluding one-time merger expenses, it is expected to close late this quarter or in the first quarter and be accretive to LCNB's earnings next year.

LCNB is being advised by FBR Capital Markets and Dinsmore & Shohl. First Capital is being advised by Sterne Agee & Leach and Luse Gorman Pomerenk & Schick.

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