Chief Executive Officer Len Dorminey of HeritageBank of the South says Alarion is a sound institution and shares a similar culture and operating philosophy. (File Photo)
ALBANY — HeritageBank of the South, the banking subsidiary of Heritage Financial Group, Inc., and Alarion Bank, the banking subsidiary of Alarion Financial Services, Inc. jointly announced a merger in which Alarion Bank will merge with and into HeritageBank, and Heritage will acquire all of the common stock of Alarion in a stock transaction valued at approximately $22.1 million.
Alarion Bank, headquartered in Ocala, Fla., has a total of six branches in Ocala, Gainesville and Alachua. As of March 31, 2014, Alarion reported approximately $283 million in assets, $200 million in loans, $241 million in deposits, and $18 million in tangible common equity. Upon completion of the transaction, Heritage is expected to have approximately $1.7 billion in assets, $1 billion in loans, and $1.4 billion in deposits.
Under the terms of the agreement, which has been unanimously approved by both boards of directors, Alarion’s shareholders will receive 0.44 shares of Heritage’s common stock for each share of Alarion common stock owned, resulting in the issuance of approximately 1,159,000 shares in the exchange. The transaction, which is subject to regulatory approval, the approval of the shareholders of Alarion, and other customary conditions, is expected to close in the third quarter of 2014.
Leonard Dorminey, Chief Executive Officer of HeritageBank, said, “We are pleased to announce the merger of Alarion Bank with HeritageBank. Alarion is a sound institution, and it shares a similar culture and operating philosophy as ours. We believe this transaction will be beneficial for the shareholders and customers of both banks, and we are excited to be able to complement our continued organic growth with this merger.
As we look at this opportunity to continue to deploy our capital, we see a good cultural and operational fit between our organizations, which should result in a smooth integration,” Dorminey continued. “While the changes for Alarion’s customers should be seamless, we think they will notice and welcome the additional products, services and resources that we will bring to these markets. We look forward to earning their confidence and loyalty.”
Lori Boring, Ocala Market President for HeritageBank, added, “This merger will greatly increase our footprint in North Central Florida, expanding our presence in the Ocala market and providing us with an initial entry into the Gainesville area - both attractive markets for HeritageBank. The combination with Alarion will triple the number of branches we have in North Central Florida and is expected to move our deposit market share into the top 10 in both Ocala and Gainesville. Lastly, the merger with Alarion, with its strong mortgage banking operations, fits nicely with our efforts to expand those services across our markets.”