Springfield-based Guaranty Federal Bancshares, Inc. and Carthage-based Hometown Bancshares, Inc. jointly announced today that they have executed a definitive Agreement and Plan of Merger providing for the merger of Hometown with and into Guaranty.

Springfield-based Guaranty Federal Bancshares, Inc. and Carthage-based Hometown Bancshares, Inc. jointly announced today that they have executed a definitive Agreement and Plan of Merger providing for the merger of Hometown with and into Guaranty.

Under the terms of the definitive merger agreement, each share of Hometown common stock will receive $20 in cash. The transaction is valued at approximately $4.6 million.

Hometown is the holding company for Hometown Bank. Hometown Bank has assets of approximately $183 million, loans of $150 million and deposits of $159 million as of September 30, 2017. Following consummation of the merger, Guaranty will have approximately $950 million in assets with 18 branch banking offices located in Missouri.

“We are extremely honored to welcome the clients and employees of Hometown to Guaranty,” said Shaun A. Burke, President and CEO of Guaranty. “Hometown and Guaranty were built based upon their communities’ needs for a bank that could deliver local, customized financial products and solutions. This transaction also provides the opportunity for Guaranty to fulfill a strategic objective of further expansion in the Joplin MSA where we have already seen significant loan growth since the establishment of our loan production office in April of 2016.”

“We are pleased that Hometown will be joining Guaranty,” said Lonnie Heckmaster, President of Hometown Bank. “Hometown and Guaranty share a similar culture as well as a shared vision of community banking, with an emphasis on the customer. This merger will allow us more capital and banking products to better serve the communities we committed to when we created Hometown Bank 19 years ago.”

The transaction is expected to provide earnings accretion for Guaranty in excess of 20 percent. Estimated tangible book value dilution at closing of approximately 7 percent is expected to be earned back in approximately three years using the "cross-over" method.

The acquisition is subject to the approvals of the appropriate banking regulatory authorities and the approval of the shareholders of Hometown. The transaction is anticipated to be completed during the first quarter of 2018 with the merger of Hometown Bank into Guaranty Bank, Guaranty’s wholly-owned subsidiary bank, in the second or third quarter of 2018.

Financial advisors involved in the transaction were Raymond James & Associates, Inc., representing Guaranty and The Capital Corporation, representing Hometown.

Legal representations in the transaction include Barack Ferrazzano Kirschbaum & Nagelberg LLP for Guaranty and Stinson Leonard Street LLP for Hometown.

 

About Guaranty Federal Bancshares, Inc.

Guaranty Federal Bancshares, Inc. (NASDAQ:GFED) has a subsidiary corporation offering full banking services. The principal subsidiary, Guaranty Bank, is headquartered in Springfield, Missouri, and has 11 full-service branches in Greene, Christian and Jasper Counties and a Loan Production Office in Webster County. Guaranty Bank is a member of the MoneyPass and TransFund ATM networks which provide its customers surcharge free access to over 24,000 ATMs nationwide. For more information visit the Guaranty Bank website: www.gbankmo.com.

 

About Hometown Bancshares, Inc.

Hometown Bancshares, Inc. is the holding company for Hometown Bank, a locally operated bank focused on providing exceptional customer service and improving the communities it serves. Opened in 1998, Hometown Bank serves the communities of Carthage, Joplin, Neosho, Oronogo and Pineville through its seven locations.