SFC Bank parent company to buy Guaranty in $152M deal

Guaranty Federal Bancshares Inc. (Nasdaq: GFED) is merging with Springfield First Community Bank in an acquisition deal.

Moline, Illinois-based QCR Holdings Inc. (Nasdaq: QCRH), the parent company of SFC Bank, this morning announced it would buy Guaranty Bank in a transaction valued at roughly $151.6 million, according to a news release.

Upon completion of the deal, the combined entity would operate under the Guaranty Bank name in Springfield and southwest Missouri. SFC Bank President and CEO Monte McNew will serve as CEO of the combined bank, with Guaranty President and CEO Shaun Burke working as its president.

“Guaranty Bank has been proud to serve our communities for more than a century,” Burke said in the release. “Joining the QCR Holdings family and the team at SFC Bank is an exciting opportunity for us to expand our product and service offerings while continuing our track record of delivering exceptional client service.”

McNew added the deal would make the combined entity "the preeminent bank in this market."

The deal expected to close in the first or second quarter of 2022 would create a combined banking entity with $2 billion in assets, $1.6 billion in deposits and $1.5 billion in loans, according to the release.

Guaranty is slated to join QCR around four years after that company purchased SFC Bank in a deal valued at $90.7 million, according to past reporting.

“Our M&A strategy has always been about finding the right partners in the right markets that share our core values and business strategy,” said Todd Gipple, president, chief operating officer and chief financial officer of QCR Holdings, in the release. “The blending of talent and expertise from both SFC Bank and Guaranty Bank, and the increased product and service capabilities of the combined bank, will result in continued strong growth in Springfield and surrounding communities."

During the third quarter, Guaranty Bank's profits rose 79% to $3.4 million. QCR reported net income of $31.6 million, an 83% increase from $17.3 million a year earlier. According to Federal Deposit Insurance Corp. data, SFC Bank's net income for the first half of 2021 was roughly $6 million, a 45% increase from $4.1 million for the first six months of 2020.

GFED stock hit multiple 52-week highs on the news this morning.