City Holding in Charleston, W.Va., has agreed to buy three branches in Kentucky from American Founders Bank in Lexington.
The deal includes $164 million in deposits and $125 in performing loans. City will pay a 5.5% premium on non-time deposits and a 1% premium on loan balances. Based on balances as of May 15, the aggregate premium is about $6.4 million. The companies expect the deal to close in the third quarter.
The $293 million-asset American Founders is selling all three of its branches in Lexington, which will give the $3.6 billion-asset holding company for City National Bank of West Virginia its first presence in the area.
"The Lexington market is clearly one of the best markets in this region of the country," City chief executive Skip Hageboeck said in a Monday news release. "We have had an interest in expanding into this area for a long time."
With the acquisition, City will operate 11 branches in Kentucky. Its current eight-branch network is entirely in Eastern Kentucky.
As a result of the deal, American Founders will exit Lexington, where it's headquartered. American Founders will retain two branches in Louisville, Ky. Bill Craycraft, president of American Founders, will become City's Lexington market president.
Boenning & Scattergood is financial adviser to City and Dinsmore & Shohl is its legal adviser. Austin Associates is American Founders' financial adviser, and Wyatt, Tarrant & Combs is its legal adviser.