In what would be the first acquisition in its 50-year history, Peoples State Bank in Wausau, Wis., is planning to buy the $108 million-asset Marathon State Bank in nearby Marathon City for $5.6 million.
The deal would boost Peoples' assets to roughly $712 million and increase its market share in Marathon County to from less than 14% to nearly 17%. Marathon's lone branch would be merged into a Peoples branch in Marathon City that would become the largest branch in Peoples' network.
Peoples, a unit of PSB Holdings Inc., announced the deal in a news release on its web site Friday. The news was first reported by the Wausau Daily Herald.
Peoples had been eyeing expansion in Marathon County and its president, Peter W. Knitt, said in a news release that acquiring rival Marathon "met many of the criteria we look for when evaluating expansion possibilities, including new core deposits, an adjacent market, a clean loan portfolio, and low integration risk."
Marathon earned $571,000 last year and at Dec. 31 just 0.01% of its loans were noncurrent, according to Federal Deposit Insurance Corp. data. Its key capital ratios are all well above levels at which regulators consider banks to be well capitalized.
Peoples said that the $5.6 million deal price is equal to 100% of the seller's tangible book value, after the payout of special dividend by Marathon to its shareholders. The sale is expected to close late in the second quarter.