This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Poage Bankshares, Inc. And Town Square Financial Corporation Announce The Signing Of A Definitive Merger Agreement

Stocks in this article: PBSK

ASHLAND, Ky., Oct. 21, 2013 /PRNewswire/ -- Poage Bankshares, Inc. (NASDAQ: PBSK, "Poage"), Ashland, KY, the parent company of Home Federal Savings and Loan Association ("Home Federal"), Ashland, KY, today announced the signing of a definitive agreement to acquire Town Square Financial Corporation ("Town Square"), Ashland, KY, the holding company for Town Square Bank.  The combined company will have over $450 million in assets, create the sixth largest bank within the Ashland, KY MSA in total deposits and operate 10 banking offices.

"We are very pleased to welcome Town Square to the Poage family," said Gene Coffman, President and Chief Executive Officer of Poage Bankshares, Inc..  "Both of our franchises have strong community-based banking cultures, excellent customer service and heavy community involvement.  This combination will help us grow our bank by effectively deploying some of our capital in our local market to build shareholder value."

The merger agreement provides that shareholders of Town Square will have the right to elect to receive 2.3289 shares of Poage common stock or $33.86 in cash for each share of Town Square common stock owned, subject to 55% of the aggregate consideration being in Poage stock and 45% in cash.  The transaction is valued at approximately $14.7 million, or a price per share to Town Square common stockholders of $33.86.  As of September 30, 2013, the transaction value represents 104% of Town Square tangible book value and 13.3 times Town Square's last twelve months earnings.

The transaction is expected to be completed in the 1 st or 2 nd quarter of 2014, subject to the affirmative vote of Town Square shareholders, regulatory approval, and other customary conditions.

The transaction is expected to be more than 70% accretive to earnings in the first full-year of combined operations.  We expect the initial tangible book value dilution to be earned back in less than 4 years as a result of the substantial accretion to earnings.  Additionally, we estimate an internal rate of return above 17% on our investment.  Capital levels will remain strong with a pro forma 13.5% tangible common equity to tangible asset ratio and a pro forma 18.7% tier 1 capital ratio. The combined company will have significant operating scale and strong competitive positioning within the Kentucky market.

Bruce VanHorn, President and Chief Executive Officer of Town Square commented, "We are very excited to join forces with a premier community bank such as Home Federal.  This merger is the combination of two high quality organizations with similar philosophies, cultures and core values.  We feel the transaction will provide significant benefits to our customers, shareholders and the communities we serve and support."

As of market close on October 18, 2013, Poage's stock price was $13.65 per share.  In addition, Poage announced earlier this week an increase in its quarterly dividend to $0.05 per share.

The Company also announced that it would conduct a stock repurchase program promptly following the release of its financial results for the quarter ended September 30, 2013, subject to applicable regulatory restrictions.

Sheshunoff & Co. served as financial advisor to Town Square Financial Corporation and rendered a fairness opinion to the company's board of directors in this transaction. Town Square Financial Corporation's legal advisor was Hunton & Williams LLP.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs