Guernsey Bancorp in Westerville, Ohio, has terminated an agreement to buy Ohio State Bank in Marion.

Guernsey called off the $5 million purchase because the company would have needed to raise more capital than originally predicted, according to Columbus Business First. Guernsey and Ohio State Bank did not immediately return calls seeking further comment.

The $123 million-asset Guernsey had planned to raise $7 million to facilitate the deal, but the Federal Deposit Insurance Corp. informed the company in an accounting evaluation that it "could not record certain trust-preferred securities at market value," according to the publication.

"Recording the securities at book value rather than market value would have required a capital raise of $9 million to $10 million... which would dilute existing shareholders," Guernsey Chief Executive Robert Patrella told Columbus Business First.

The $100 million-asset Ohio State Bank will look for another buyer, according to the publication. Guernsey is also open to future deals, Patrella said.

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