Eagle Bancorp Montana, Inc. (NasdaqGM:EBMT) entered into an agreement and plan of merger to acquire Big Muddy Bancorp, Inc. for $18.7 million on August 21, 2018. The merger consideration is subject to the adjustments. Under the terms of the agreement, each outstanding share of Big Muddy Bancorp common stock will be converted into the right to receive 20.49 (exchange ratio) shares of Eagle common stock, subject to the payment of cash in lieu of fractional shares. As a result, 996,142 Eagle shares will be issued. Big Muddy will merged with and into Eagle, with Eagle continuing as the surviving corporation. The State Bank of Townsend, subsidiary of Big Muddy Bancorp will be merged into Opportunity Bank of Montana, subsidiary of Eagle Bancorp Montana. The three divisions operated by The State Bank of Townsend, Farmers State Bank of Denton, Dutton State Bank and The State Bank of Townsend, will retain their brand names. Opportunity Bank will have, upon completion of the transaction, 21 retail branches in Montana. The name of the Resulting Bank shall be Opportunity Bank of Montana. If either party terminates the merger agreement due to specified breaches of the merger agreement by the other party, the breaching party will be required to pay the non-breaching party a termination fee of $0.1 million. The merger agreement also provides that Big Muddy must pay Eagle a break-up fee of $0.75 million if the merger agreement is terminated in certain circumstances. The transaction has deal value/reported LTM earnings multiple of 13.2x. Upon the closing of the merger, Benjamin G. Ruddy, currently President of Big Muddy and The State Bank of Townsend will join the Boards of Directors of both Eagle and Opportunity Bank and will lead the combined bank. The Executive Vice President and Chief Operating Officer of Big Muddy Bancorp, Joni Carlton, will remain as President of the Townsend location. The Dutton, Denton, and Choteau branches will continue to be managed by Alice Copenhaver, Josh Webber, and Richard Swanson, respectively. Tamariel Christopher will continue to be Big Muddy’s key commercial lender in Cascade County. The transaction is subject to the approval of the agreement by the holders of two-thirds of Big Muddy’s outstanding common stock, Big Muddy Bancorp, Inc will hold a special meeting of shareholders on December 19, 2018 for the holders of BMB common stock to consider and vote on a proposal to approve the Agreement and Plan of Merger and a proposal to adjourn the BMB special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the merger agreement. Completion of the merger is also subject to receipt of required regulatory approvals including approvals from the Board of Governors of the Federal Reserve System, or Federal Reserve, and the Montana Division of Banking and Financial Institutions, Merger shall qualify as a tax-free reorganization under the provisions of Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended and including the Treasury Regulations promulgated thereunder, the effectiveness of the registration statement for the Eagle common stock to be issued in connection with the merger, the quotation and listing of the Eagle common stock to be issued in the merger on the Nasdaq Global Market, the Board of Directors of Big Muddy Bancorp shall not have withheld, withdrawn or modified its recommendation to its shareholders to approve the agreement and the transactions contemplated thereby and shall not have approved any alternative acquisition proposal, the holders of no more than 10% of Big Muddy’s common stock shall have exercised their dissenters’ rights, Big Muddy’s adjusted tangible stockholders’ equity must be not less than $13.3 million and third party consents. The board of directors for both Eagle and Big Muddy unanimously approved the transaction. The deal is expected to close during the first quarter of 2019. The transaction is expected to be 9% accretive to EPS in 2019 and 2020. On December 19, 2018, the shareholders of Big Muddy Bancorp, Inc. approved the merger. The Board of Governors of the Federal Reserve System and the Montana Division of Banking and Financial Institutions have regulatory approved the merger and other transactions contemplated by the Merger Agreement. The transaction is subject to the satisfaction of customary closing conditions and expected to be completed on or about January 1, 2019. Panoramic Capital Advisors acted as the financial advisor and Raymond J. Gustini and Lloyd H. Spencer of Nixon Peabody LLP acted as the legal advisors for Eagle. Mark C. Dietzen and Michael P. Warren of Ballard Spahr LLP acted as the legal advisor and Vining Sparks IBG, LP acted as the financial advisor for Big Muddy. Mountain Title Company acted as the escrow agent on the transaction. Computershare, Inc. served as the transfer agent for Eagle Bancorp. Vining Sparks IBG, LP received a fee of $0.025 million for rendering its opinion. This fee is not contingent upon consummation of the transaction. Eagle Bancorp Montana, Inc. (NasdaqGM:EBMT) completed the acquisition of Big Muddy Bancorp Inc. on January 1, 2019.