RICHMOND, Ind.–(BUSINESS WIRE)–West End Indiana Bancshares, Inc. (the “Company”) (OTC Pink:WEIN), and its subsidiary, West End Bank, S.B. (the “Bank”), announced today that they have renegotiated their previously announced purchase and assumption agreement (the “revised agreement”) with Three Rivers Federal Credit Union (“3Rivers”). Upon completion, the purchase and assumption transaction will result in, among other things, 3Rivers acquiring the assets and assuming the liabilities of the Bank in an all-cash transaction (the “Sale”). The Sale is the first step in the larger transaction contemplated by the revised agreement (the “Transaction”) which includes (i) the Sale, (ii) the merger of the Bank into the Company, (iii) the dissolution of the Company and (iv) the distribution of the Company’s remaining assets to the Company’s stockholders. Under the revised agreement, 3Rivers will pay in cash to the Bank at closing an amount equal to Forty-One Million Two Hundred Fifty-Three Thousand Six Hundred Dollars and No/100 ($41,253,600.00), subject to certain potential adjustments relating primarily to the Bank’s adjusted closing equity.
The adjustment in aggregate purchase price was based primarily on a significant increase in the termination cost of the Bank’s defined pension plan due to the unprecedented decline in long-term interest rates as well as significant economic and market uncertainties related to the COVID-19 pandemic.
Under the revised agreement, the Company estimates that stockholders will receive between $35 and $37 per share upon the completion of the Transaction. This estimate is based on a number of assumptions and other factors that are subject to change. Accordingly, Company stockholders should not assume that they will receive a per share price within the range set forth above.
The parties have received certain regulatory non-objections and approvals from the Federal Reserve Board of Governors and the Federal Deposit Insurance Corporation and expect but have not yet received the required approvals from the Indiana Department of Financial Institutions and the National Credit Union Administration. Assuming such approvals are received in a timely manner, and subject to other customary closing conditions, the parties anticipate closing the Sale on or about May 31, 2020. Company stockholders approved the Transaction at a special meeting held on April 15, 2020.
Following the completion of the Sale, it is expected that the Bank will merge into the Company, and the Company will thereafter be dissolved. It is expected that this process will take approximately 120 days to be completed. Stockholders will not receive the Transaction consideration until this process is substantially completed.
As part of the dissolution process, payments will be made to certain former depositors of the Bank pursuant to liquidation accounts maintained by the Bank and the Company. Depositors entitled to payments under the liquidation accounts will be provided notice of the amount and method of payment prior to the payments being made.
About West End Indiana Bancshares, Inc.
West End Indiana Bancshares, Inc. is the holding company for West End Bank. The Bank has four branch locations, two in Richmond, one in Hagerstown and one in Liberty, Indiana. The Bank also hosts limited service branches in schools within Richmond Community Schools and has a limited service branch and ATM located within Richmond High School. At March 31, 2020, the Company had total assets of $ 295.9 million.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements include statements regarding the anticipated closing date of the transaction and anticipated future plans and expectations. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Certain factors that could cause actual results to differ materially from expected results include delays in completing the transaction, uncertainties regarding the proper treatment of the organization’s liquidation account, uncertainties regarding the dissolution process, the financial and non-financial impact of the COVID-19 pandemic, transaction expenses, additions to the Bank’s allowance for loan losses, changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business in which 3Rivers and the Bank are engaged, changes in the securities markets and other risks and uncertainties. Except as required by law, neither 3Rivers nor the Company undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.
Timothy R. Frame
President and Chief Executive Officer
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