AB&T Financial, the parent company of Alliance Bank & Trust Company, has entered into a definitive agreement to merge with and become part of 1st Financial Services, the parent company of Mountain 1st Bank & Trust Company.
Under the terms of the agreement, AB&T Financial shareholders will exchange each of their approximately 2.68 million shares of common stock and 369,636 stock options for 1.17 1st Financial Services common shares, and the approximately 369,636 stock options would be exchanged for options to purchase shares of 1st Financial common stock on the same basis.
The merger is designed to be a tax-free exchange. Cash will be paid in lieu of fractional shares. The transaction would have a total value of approximately $17 million, based on the recent trading price for 1st Financial Services shares.
The terms of exchange represent pro forma ownership in the resulting combined institution of approximately 37.8% and 62.2% for AB&T Financial and 1st Financial Services shareholders, respectively, on a diluted basis. Closing of the merger, which is expected to occur in the second or third quarter of 2009, is subject to certain conditions, including approval by the shareholders of both companies and regulatory approval.
Alliance Bank & Trust Company and Mountain 1st Bank & Trust Company will continue to operate under independent charters immediately following the transaction.
AB&T Financial is being represented by FIG Partners as financial advisor and Gaeta & Eveson as legal counsel. 1st Financial Services is being represented in the merger transaction by The Carson Medlin Company as financial advisor and Ward and Smith as legal counsel.
