Eureka Homestead Bancorp (Eureka), the holding company of Eureka Homestead, has agreed to be acquired by the Eureka Investor Group (Investor Group), for a total consideration of $13m.
Under the terms of the merger agreement, Eureka will be allowed to pay a dividend that equals to an amount by which its adjusted tangible shareholders’ equity exceeds $10m.
The adjusted tangible shareholders’ equity is defined as its GAAP equity, subject to negative adjustments for transaction expenses and certain allowance for credit losses adjustments.
Assuming regulatory approval to pay the dividend, Eureka shareholders are expected to receive between $20 and $22 in cash consideration for each share of its common stock.
The transaction that has been unanimously approved by the boards of directors of both companies is expected to be completed in the first or second quarter of 2024.
It is subject to several customary closing conditions, including approvals from the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and Eureka’s shareholders.
The transaction is also subject to the Investor Group raising at minimum of $43m to fund the transaction consideration and add additional capital to the combined company.
Eureka Homestead Bancorp CEO Alan Heintzen said: “The Eureka Investor Group is making a major investment in Eureka Homestead, and will create a new, full-service community bank in the New Orleans area.
“Our customers should rest assured that they will continue to see the same friendly faces they always have, and soon will be able to enjoy an expanded array of additional banking products and services. This is an exciting win-win for our customers and the New Orleans area.”
The Investor Group is a newly formed entity headed by Lisa Narrell-Mead and Bob Goldstein, both long-term banking directors, investors, and executives with strong ties to New Orleans.
Eureka Homestead is a federal savings association based in Metairie, Louisiana, US, with $103.7m in total assets and $19.3m in total equity capital, as of 30 June 2023.
Upon closing of the proposed transaction, Eureka will be merged into a wholly owned subsidiary of the Investor Group, with Eureka as the surviving entity.
Investor Group will own 100% of the outstanding shares and its banking subsidiary, Eureka Homestead.
Performance Trust Capital Partners served as financial advisor and Luse Gorman, PC as legal counsel to Eureka Homestead Bancorp and Eureka Homestead, and Otteson Shapiro served as legal counsel to Eureka Investor Group, on this transaction.
Eureka Investor Group chair Lisa Narrell-Mead said: “We want to thank the current Board of Directors of Eureka for the opportunity to expand on the Eureka legacy.
“We are committed to the customers and employees and are making a significant investment into the Bank which will allow us to improve our offerings of products, technology and convenience while maintaining an exceptional customer experience.”
