SB Financial Group, Inc. (NASDAQ: SBFG), the parent company of The State Bank and Trust Company, and Marblehead Bancorp, the parent company of The Marblehead Bank, have announced a definitive merger agreement valued at approximately $5 million. Under this agreement, Marblehead Bancorp will merge with SB Financial, and The Marblehead Bank will integrate into The State Bank and Trust Company. This strategic move, unanimously approved by both boards of directors, is set to enhance SB Financial’s regional presence and service capabilities.

Deal Value and Merger Structure

The merger agreement stipulates that Marblehead Bancorp shareholders will receive $196.31 in cash for each share of Marblehead common stock. This transaction reflects SB Financial’s commitment to expanding its operations and improving its service offerings in Northwest Ohio. The integration will result in the addition of two full-service branches and one limited-service branch to State Bank’s existing network, significantly strengthening its position in the Marblehead and Ottawa County regions.

Strategic Expansion and Market Impact

This merger aligns with SB Financial’s long-term strategic goal of growing its footprint in key markets. The acquisition of Marblehead Bank’s branches is expected to bolster State Bank’s presence in a region with promising economic prospects. Mark Klein, Chairman, President, and CEO of SB Financial, expressed optimism about the merger, highlighting the alignment of values and community focus between the two institutions. Klein noted that the merger will allow both banks to build upon their strong legacies and deepen their connections with local communities.

Deborah Stephens, Interim President of Marblehead Bank, underscored the positive impact of the merger on shareholders, customers, and the communities served. She praised the State Bank team and expressed confidence that Marblehead Bank’s customers would benefit from enhanced banking services while maintaining the community-focused approach they value. This sentiment reflects a broader trend in the banking industry where mergers are increasingly seen as a way to enhance service offerings and operational efficiency.

Financial Projections and Operational Enhancements

Pending regulatory approvals and shareholder consent, SB Financial aims to finalise the merger in the fourth quarter of 2024. Upon completion, the combined entity will have approximately $1.4 billion in total assets, $1.1 billion in net loans, and $1.2 billion in total deposits, based on financial data as of June 30, 2024. This expansion will solidify SB Financial’s position as a significant player in the regional banking sector.

The State Bank and Trust Company, headquartered in Defiance, Ohio, has a rich history of over 120 years. It operates 23 offices, including one in Fort Wayne, Indiana, and 23 ATMs, alongside six loan production offices in the Tri-State region of Ohio, Indiana, and Michigan. SB Financial also owns SBFG Title, LLC, known as Peak Title, which offers title insurance and opinions across the region.

Marblehead Bancorp, based in Marblehead, Ohio, has been a cornerstone of its community since March 1907. The Marblehead Bank is the only physical bank on the Marblehead Peninsula, with two full-service branches and one limited-service office. Its long-standing commitment to local banking services and customer relationships has established it as a vital institution in the area.

Legal and Advisory Teams

Vorys, Sater, Seymour and Pease LLP is serving as legal counsel for SB Financial, ensuring compliance and facilitating the merger process. Janney Montgomery Scott is acting as financial advisor to Marblehead Bancorp, providing a fairness opinion to its board of directors. Shumaker, Loop & Kendrick, LLP is the legal counsel for Marblehead Bancorp, supporting the transaction’s legal and regulatory aspects.

  Deborah Stephens, Janney Montgomery Scott, Marblehead Bancorp, Mark Klein, SB Financial Group, Shumaker Loop & Kendrick LLP, The Marblehead Bank, The State Bank and Trust Company, Vorys Sater Seymour and Pease LLP