Southwest Bancorp in Stillwater, Okla., has agreed to buy First Commercial Bancshares in Edmond, Okla.
The $2 billion-asset Southwest said in a press release Wednesday that it will pay $41.7 million in cash and stock for the $305 million-asset parent of First Commercial Bank. First Commercial has five branches around Oklahoma City, along with three branches in Denver and a location in Colorado Springs, Colo.
The deal is expected to close in the fourth quarter.
"We are excited about adding the state of Colorado to our banking franchise, an area where Southwest already has many banking relationships," Mark Funke, Southwest's president and chief executive, said in the release. "This transaction demonstrates our continuing commitment to increasing shareholder value by prudently and accretively deploying our strong capital base."
Steve Davis, First Commercial's chairman, will join Southwest's board.
The purchase price represents 141% of First Commercial's adjusted tangible common equity. Southwest said it expects the acquisition to be roughly 12% accretive to next year's diluted earnings per share, excluding merger-related costs, and about 14% accretive in 2017. Southwest said it should take less than four years to earn back the deal's expected 4% dilution to its tangible book value, including about $1.3 million in pretax restructuring charges.
Southwest was advised by Keefe, Bruyette and Woods and McAfee & Taft. First Commercial was advised by Hartzog Conger Cason & Neville.
