Richwood Bancshares, Inc. (“Richwood”), the holding company for The Richwood Banking Company (“Richwood Bank”), and Home City Financial Corporation (“Home City”), the holding company for Home City Federal Savings Bank of Springfield, announced today that they have signed a definitive merger agreement whereby Richwood will acquire Home City in an all-cash transaction.

Home City operates two full-service offices in Springfield, Ohio, and has approximately $167.5 million in assets, $145.2 million in loans, $118.6 million of deposits and $19.7 million in common equity as of March 31, 2018.

This transaction reinforces a socially aware mindset to create lasting, tangible connections within communities that go beyond typical financial transactions. Through this agreement, Richwood Bank will strengthen its presence through the adjacent market of Springfield. Once finalized, Richwood Bank will have eight branches serving five counties across central and southwestern Ohio with continued excellence.

Subject to the terms of the merger agreement, which has been approved by the Board of Directors of each company, Home City shareholders will receive $37.32 per share in cash for each outstanding common share of Home City. For any unexercised stock options of Home City, Richwood will pay in cash the spread between the exercise price of each option and the per share merger consideration. Home City has 818,318 shares outstanding, as well as 42,800 option shares with a weighted average exercise price of $10.45. The transaction is valued at $31.7 million, or 155% of Home City’s tangible book value as of March 31, 2018.

Chad Hoffman, President and CEO of Richwood and its wholly-owned subsidiary The Richwood Banking Company, noted, “This is a very exciting time for our company, customers and community. We look forward to welcoming and serving the customers of Home City and expanding into new communities.” Mr. Hoffman continued, “We are dedicated to inspire, protect and celebrate anything that makes communities thrive. The positive surge of success within our current markets has validated that customers bank with us to experience a memorable interaction versus an automated transaction. It’s exciting to introduce our unique banking outreach model to those who call Springfield home. This may be called an acquisition, but we view it as a partnership that allows us to expand our reach to more Ohioans like us.”

Bill Stapleton, President and CEO of Home City, stated, “We look forward to serving our customers with a broader platform through our new partnership with Richwood. The Springfield community will benefit from the expanded scale and capabilities of our combined operations. With a larger lending limit and additional products and services, we will be in an even better position to compete, and we know that our employees will be ready for the challenge. We believe that this is a favorable outcome for our shareholders, community and staff.”

When the transaction is completed, Richwood will have pro forma consolidated assets of approximately $673.5 million with eight banking offices in Ohio. Subject to customary regulatory approvals, Home City shareholder approvals and other conditions set forth in the definitive merger agreement, the transaction is anticipated to close in the fourth quarter of 2018. At that time, Home City Federal Savings Bank branches will become branches of Richwood Bank.

Richwood has received a fairness opinion from Mercer Capital and is being advised by Dinsmore &Shohl LLP. Home City is being advised by Boenning& Scattergood, Inc. and Vorys, Sater, Seymour and Pease LLP.