Equity Bancshares in Wichita, Kan., has agreed to buy Community First Bancshares in Harrison, Ark.
The $1.5 billion-asset Equity said in a press release Thursday that it will pay $68.8 million in cash and stock for the $475 million-asset parent of Community First Bank. The deal, which is expected to close in the fourth quarter, values Community First at 129% of its tangible book value.
Community First has five branches, $352 million in loans and $395 million in deposits.
Equity said the deal is contingent on Community First shedding its ownership stake in White Rivers Bancshares. That $8.2 million investment is expected to be distributed to Community First's shareholders prior the merger is completed.
It would be Equity's first bank acquisition since its initial public offering in November.
"We believe that this transaction continues Equity's model of adding midsize markets to supplement its metropolitan areas of Kansas City and Wichita," Brad Elliott, Equity's chairman and chief executive, said in the release.
Equity d it expects the merger to be 26% accretive to diluted earnings per share next year, with $6.6 million in transaction-related costs. Equity said it should take 3.5 years to recoup the deal's 9% dilution to its own tangible book value.
Equity was advised by Keefe, Bruyette & Woods and Norton Rose Fulbright. Community First was advised by Stephens and Bryan Cave.