Poage Bankshares in Ashland, Ky., has agreed to acquire Commonwealth Bank in Mount Sterling, Ky.
The acquisition will allow the $430 million-asset Poage to expand its market share in the northern part of the state. It also gives the bank a stronger foothold in the Lexington metropolitan area where Commonwealth, a $19 million-asset mutual savings bank, operates one location.
A purchase price was not announced for the all-stock deal, which is expected to close in the second quarter of next year.
"Commonwealth is an excellent geographical fit within our market area along the Interstate 64 corridor between our Ashland main office and our Nicholasville branch office in the suburb of Lexington," said Ralph Coffman, Poage's president and chief executive, in a press release Tuesday.
Before the acquisition is completed, Commonwealth will convert to a stock company and issue all outstanding shares to Poage. Depositors of Commonwealth will then receive a priority offering of the bank's newly issued common stock. Poage will issue any unsold shares in a community offering.
Ryan Steger, Commonwealth's chief executive, is expected to join the combined bank as area president for Montgomery County. Curt Steger, an executive vice president at Commonwealth, will join the bank as a senior business development officer.
Poage, the parent company of Town Square Bank, has been at the center of a controversial proxy battle with activist investor Joseph Stilwell.
Poage was established 125 years ago as a savings and loan association. The bank converted to a stock company three years ago and completed its first acquisition, of the Ashland-based Town Square, in March.