Fentura to acquire Farmers State Bank of Munith

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FENTON, Michigan and MUNITH, Michigan, June 22, 2021 (GLOBE NEWSWIRE) – The Boards of Directors of Fentura Financial, Inc. (OTCQX: FETM), the holding company of The State Bank, based in Fenton, and Farmers State La Munith-based bank today announced the signing of a definitive agreement whereby Fentura Financial, Inc. (“Fentura”) will acquire Farmers State Bank (“FSB”) for $ 15.5 million in cash. Based on the current shares outstanding, FSB shareholders will receive $ 103.33 in cash for each share.

The boards of directors of both financial institutions have unanimously approved the purchase, which will include the acquisition of all shares of FSB by Fentura. Excluding transaction costs, Fentura expects earnings per share (“EPS”) to increase 12-14% in each of the first two years after closing. The transaction is expected to dilute the tangible book value by 6.1% at closing, but anticipates a repayment of the dilution of the tangible book value in less than four years using the crossover method. An Investor Presentation providing further details of the transaction is available on Fentura’s website at www.fentura.com.

As of March 31, 2021, the FSB was reporting $ 104 million in assets, $ 45 million in loans and $ 95 million in deposits. State Bank branches will grow to 20 locations, with the addition of FSB offices in Munith, Stockbridge and Grass Lake.

Ron Justice, President and CEO of Fentura, said, “We are excited about the opportunity to partner with Farmers State Bank and expand State Bank into Ingham and Jackson counties. The combination brings together two organizations that believe in community banking and a shared commitment to serving our clients and local communities. The resulting Bank operations will further strengthen our strong core deposit base, enabling us to increase shareholder value by taking advantage of opportunities for asset growth and expansion into new market areas. “

Craig Goodlock, Chairman and CEO of FSB, said: “I am very pleased to be able to introduce State Bank to the communities that I have served for forty years and that this bank has served for almost one hundred years. It is heartwarming for me to note that the State Bank is in fact twenty-four years older than the Farmers State Bank, having been established in 1898! The State Bank is a well-managed and successful institution with which I have been familiar throughout my career. The combination of our two community banks will provide a greater range of consumer and business products, the trust and wealth management products that Farmers State Bank has not been able to offer but which are in high demand locally, and expanded online access for opening deposit accounts and completing loan applications. The people of our towns, villages and countryside will be very happy with what this amalgamated community bank can do for them. “

Jeanne Richter, President and Chief Financial Officer of FSB added: “We have found in The State Bank a partner who complements our values, our community and our relationships. Knowing that we can bring additional opportunities to our clients while maintaining our focus on customer service and community is what makes this partnership so exciting. “

Once the transaction is finalized, Jeanne Richter will join the State Bank management team and Craig Goodlock will retire.

The transaction is subject to the approval of shareholders of FSB, the Federal Deposit Insurance Corporation, the Michigan Department of Insurance and Financial Services and the Federal Reserve Bank of Chicago. The transaction is expected to close in the fourth quarter of 2021.

Fentura is advised by investment bank ProBank Austin and law firm Howard & Howard Attorneys PLLC. FSB is advised by investment bank Donnelly Penman & Partners, Inc. and law firm Bodman, PLC.

About Fentura Financial, Inc. and State Bank
Fentura Financial, Inc. is the holding company of the State Bank. It was formed in 1987 and is traded on the OTCQX exchange under the symbol FETM, and has been recognized as one of the 50 best performing stocks in recent years on this exchange.

The State Bank, founded in 1898, is a full-service, 5-star, Bauer Financial, commercial, retail, and trustworthy bank headquartered in Fenton, Michigan. It currently operates 17 full-service branches in Genesee, Livingston, Oakland, Saginaw and Shiawassee counties. The State Bank’s commercial department offers a full range of products, including lines of credit, term loans, commercial mortgages, SBA loans, and a full line of cash management products. The retail department offers personal chequing, savings, time and IRA accounts as well as a wide variety of loan products including home equity, auto and personal loans. The Residential Loans Department offers residential mortgage loans for construction, purchase and refinancing. The Wealth Management Department offers a full range of trust and portfolio management services. More information is available at www.thestatebank.com or www.fentura.com.

About the Farmers State Bank
Farmers State Bank, founded in 1922, is an independent community bank committed to providing services to residents and businesses of Jackson, Ingham, Livingston and Washtenaw counties. It has assets of approximately $ 104 million and currently operates offices in Munith, Stockbridge and Grass Lake. More information can be found at www.farmerstatebank.com.

Forward-looking statements
This press release contains statements on the expected results of the consolidation of Fentura and FSB which are not statements of historical fact. These statements are “forward-looking statements” for the purposes of applicable securities laws and are based on current information and / or management’s good faith belief about future events. The words “estimate”, “believe”, “expect”, “anticipate” and similar expressions mean forward-looking statements. Forward-looking statements should not be interpreted as a guarantee of future performance. By their nature, forward-looking statements involve inherent risks and uncertainties, which change over time; and actual performance could differ materially from that anticipated by forward-looking statements. Fentura assumes no obligation to update or revise any forward-looking statement.

Contacts:
Ronald L. Justice
President and CEO
Fentura Financial, Inc.
810.714.3902
Aaron D. Wirsing
Financial director
Fentura Financial, Inc.
810.714.3925
Craig M. Goodlock
Chairman and CEO
State Farmers Bank
517.985.1061
Jeanne E. Richter
President and Chief Financial Officer
State Farmers Bank
517.985.1063


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