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Eagle Bancorp Montana, Inc. (NASDAQ: EBMT) and its wholly-owned subsidiary, American Federal Savings Bank (collectively “Eagle”) today announced the receipt of regulatory approval from the Office of the Comptroller of the Currency for the purchase of seven branch banking locations from Sterling Savings Bank, a wholly-owned subsidiary of Sterling Financial Corporation (NASDAQ: STSA). The transaction will expand Eagle’s franchise to 13 branches and extend its branch network throughout Southern Montana. In addition, the transaction also strengthens Eagle’s mortgage origination franchise and adds a wealth management business headquartered in Bozeman.
Eagle will acquire approximately $187 million of deposits for an estimated deposit premium of 3.88%, or approximately $7.3 million. Additionally, Eagle will receive approximately $44 million of pass-rated, performing loans. It is expected that the transaction will be immediately accretive to Eagle’s earnings per share.
“This transaction will double our branch network and increase our footprint across southern Montana, while entering the two largest markets in the state, Billings and Missoula. This transaction is, we believe, a positive one for our Company and its shareholders because it provides us with entry into new markets and permits the kind of growth, through a single transaction, that otherwise would take several years if we pursued a series of smaller transactions. We will become the sixth largest bank (in terms of deposits) headquartered in Montana. We are excited about the new customer base we will be working with and of course about the melding of Sterling’s Montana staff with our own great employees,” said Peter J. Johnson, President and CEO of Eagle Bancorp Montana. Of the seven branches being acquired six are in new markets for Eagle, including two in Missoula, one in Billings, and one each in Hamilton, Livingston and Big Timber. The seventh is in Bozeman where Eagle already has a presence.
Upon completion of the transaction, Eagle expects to have total assets of approximately $500 million, total deposits in excess of $400 million, and a tangible common equity to tangible assets ratio of approximately 9%.