Wayne Savings Bancshares in Wooster, Ohio, and Main Street Financial Services in Wheeling, West Virginia, agreed to merge Thursday after six months of negotiations, Wayne Savings CEO James VanSickle said.
Under the terms of their agreement, the $604 million-asset Main Street would pay $30.53 for each Wayne Savings share, a 15% premium over the stock's $26.50 closing price Wednesday. The total value for the all-stock transaction is $68 million.
The combined company would have assets of $1.35 billion, a market capitalization of approximately $130 million and 18 branches stretching from Wooster, in northeast Ohio, to Wheeling in the Northern Panhandle of West Virginia. The companies have no geographic overlap, so no branch closures are anticipated, VanSickle said.
The deal, which is expected to close in the second half of 2023, resembles a merger of equals much more than a standard takeover, according to both VanSickle and Richard Lucas, Main Street's president and CEO. Wayne Savings shareholders would own about 52.5% of the merged company, with Main Street investors holding the remaining 47.5%. The 13-member board would have seven Wayne Savings directors and six from Main Street.
VanSickle would be president and CEO of the combined holding company and CEO of its subsidiary bank, while Lucas has agreed to serve as bank president. Todd Simko, Main Street's chief business and chief risk officer, would serve as chief operating officer of the bank.
At the board level, Wayne Savings Chairman Mark Witmer would chair the merged company. Main Street Chairman Nicholas Sparachane, who served as Wheeling's mayor from 2000 to 2008, would serve as vice chairman.
The merged company would adopt the Main Street brand but keep its headquarters in Wooster.
"When you look at the numbers, it's striking how close things are in terms of ownership, capital, the management and the board," VanSickle said in an interview. "If you can find a merger of equals that's more equal, let me know."
"As time progressed, we just saw what a nice mesh this would be between two distinct banks," Lucas said Thursday in an
The pact between Wayne Savings and Main Street comes amid a slow start to dealmaking in 2023. According to Compass Point analyst Laurie Havener Hunsicker, only a handful of deals have been reported, with just two — Greenville South Carolina-based
On Wednesday, the $1.2 billion-asset Linkbancorp of Camp Hill, Pennsylvania,
Wayne Savings has reported record earnings each of the past six years, including a $9 million profit in 2022, up 21% from 2021. Main Street earned $5.65 million in 2022, up 4% year over year.
Wayne Savings would get a liquidity boost from the Main Street deal. It struggled to fund the 31% loan growth it experienced in 2022, relying in part on brokered certificates of deposit. VanSickle acknowledged what he termed the deal's "quantitative" benefits.
Wayne Savings ended 2022 with a loan-to-deposit ratio topping 98%, significantly higher than the 78% figure Main Street reported.
At the same time, VanSickle, Wayne Savings' CEO since August 2017, said the key driver behind Thursday's deal announcement was the increasing level of comfort both sides felt over the course of six months of talks. "Every time we met, we came away feeling better and better about this opportunity," VanSickle said. "We believe we've gained a big family."
Wayne Savings' roots stretch back to 1899, while Main Street was founded in 2001. As of June 30, 2022, Main Street held the No. 3 deposit share in Wheeling, with deposits totaling $422.1 million, or 8% of the region's $5.3 billion deposit market. Wayne Savings is the No.3 bank in Wayne County, Ohio, its home market, with a 13% share of the $2.8 billion deposit market.
According to VanSickle, both Wayne Savings and Main Street have grown by focusing on smaller cities and communities where larger competitors typically steer clear. VanSickle termed it a "county seat" strategy, adding that the merged company's greater scale could lead to a "more aggressive" expansion posture.
