22 SEPTEMBER / OCTOBER 2018 The number of listed Indiana banks and thrifts that gained in share price as of July 31, compared to our prior report as of May 31, outnumbered those that lost share price by a margin of 2 to 1. Of the 33 banks and thrifts tracked, only six are in negative territory for the year. This improvement mirrors the YTD increases in all of the broad market and most of the bank indices. Of the medians for NASDAQ and OTC Indiana banks and thrifts, NASDAQ banks as a group are up over 12.2 percent YTD, more than all of the broad and bank indices noted. Old National Bank announced on June 21 that it is acquiring Klein Financial Inc. of Chaska, Minnesota. ONB is buying the $2 billion-in-assets bank for $433.8 million in an all-stock transaction. The price represents 235.8 percent of tangible book value and 23.8 times earnings. Strategically, the acquisition will allow ONB to double its deposit market share in the Greater Twin Cities area, a market it entered in 2017 when ONB acquired Anchor Bancorp Inc. of Saint Paul, Minnesota. It is interesting to note that the acquisition may result in ONB having more out-of-state deposits than Indiana deposits, while being twice the size of Indiana’s next largest bank, First Merchants Corp. NorthWest Indiana Bancorp, the parent of Munsterbased Peoples Bank, announced on July 31 that it is acquiring AJS Bancorp of Midlothian, Illinois, just days after completing its acquisition of First Personal Financial Corp. of Orland Park, Illinois. First Personal is a $146 million bank for which NorthWest paid $15.6 million (134 percent of tangible book value) in a 45 percent stock transaction. AJS Bancorp is a $192 million bank for which NorthWest expects to pay $34.6 million (109.2 percent of book value) in a 55 percent stock transaction. Strategically, NorthWest enters Illinois with both acquisitions, each bringing three branches located southwest of Chicago. NorthWest will grow from $959 million in assets before the two acquisitions to approximately $1.3 billion. Limberlost Bancshares Inc., the parent company of Bank of Geneva, announced on Aug. 20 that it is merging with Farmers & Merchants Bancorp Inc. of Archbold, Ohio. FMAO will pay $88.8 million (288 percent of tangible book value and 20.4 times C-Corp equivalent earnings) in a 90 percent stock transaction. FMAO has assets of $1.1 billion, and Limberlost has assets of $287 million. With Limberlost’s six locations, FMAO will have 10 Indiana offices and 21 Ohio offices. Mid-Southern Bancorp Inc. completed the secondstep conversion of Mid-Southern MHC through the public issuance of up to $25.6 million on July 11. With assets of $215 million before the issuance, MSVB is expected to have a tangible common equity ratio of 23 percent, making it one of the most overcapitalized public thrifts in the United States. HB Stock Analysis Review as of July 31, 2018 Michael A. Renninger Principal Renninger & Associates LLC mrenninger@ renningerllc.com Renninger & Associates LLC is a Diamond Associate Member of the Indiana Bankers Association. Indiana Statistics To access statistics through July 31, click on the hand icon in HB Digital, or go to: indianabankers.org/bank-thrift-stock-update. INDIANA BANK & THRIFT STOCK UPDATE
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