Mercantile to Buy Ameribanc In $87 Million Stock Deal
Mercantile Bancorp, St. Louis, said it has agreed to acquire Ameribanc Inc., a $1.2 billion-asset banking company in northwestern Missouri, for about $87 million in stock.
The acquisition gives Mercantile, with $8 billion in assets, a stronger franchise near the Kansas border. This will become more important next year, when Missouri banks will be allowed to acquire banks in the neighboring state.
Looking Toward Kansas
"All the Missouri holding companies are expected to do something in Kansas," said Joseph A. Stieven, a banking analyst with Stifel, Nicolaus & Co., St. Louis.
Mercantile is paying roughly 94% of Ameribanc's book value. But analysts consider that a fair price considering Ameribanc's anemic performance.
For the first nine months of this year, Ameribanc earned only a 0.35% return on assets, compared to 0.87% for Mercantile.
"It's hard to tell what a fair price is for Ameribanc, since its profitability has been lackluster for years," said Anthony J. Polini, banking analyst with A.G. Edwards & Sons Inc. in St. Louis.
$26 a Share Minimum
The transaction calls for Ameribanc shareholders to receive 0.57 shares of Mercantile's common stock for each of their shares, with a guaranteed minimum of $26 a share.
Mercantile estimates the acquisition will cause no dilution to its own shareholders next year and will enhance earnings in 1993.
Regulatory and shareholder approvals are expected in the first quarter of next year.