MID-SOUTHERN BANCORP, INC., MID-SOUTHERN SAVINGS BANK, FSB AND BEACON CREDIT UNION SIGN DEFINITIVE PURCHASE AND ASSUMPTION AGREEMENT

SALEM, Ind. and WABASH, Ind., Jan. 25, 2024 /PRNewswire/ -- Beacon Credit Union and Mid-Southern Bancorp, Inc. ("Mid-Southern Bancorp") (OTCQX: MSVB), the holding company for Mid-Southern Savings Bank, FSB ("Mid-Southern Bank"), announced today that Beacon Credit Union, Mid-Southern Bancorp and Mid-Southern Bank have signed a definitive purchase and assumption agreement whereby Beacon Credit Union will acquire substantially all of the assets and assume substantially all of the liabilities (including all of the deposit account liabilities) of Mid-Southern Bank in an all-cash transaction (the "P&A Transaction"). As consideration for the P&A Transaction, Mid-Southern Bank will retain $10.0 million of its cash and Beacon Credit Union has agreed to pay Mid-Southern Bank $45,198,789 in cash (the "Purchase Price"), subject to a dollar-for-dollar increase or reduction if Mid-Southern Bank's total equity at closing as calculated in the purchase and assumption agreement is above or below $30,711,000. The parties have the right to terminate the purchase and assumption agreement if the Purchase Price is less than $36,198,789.

Following the completion of the P&A Transaction and after all of the respective obligations of Mid-Southern Bancorp and Mid-Southern Bank (including settlement of the liquidation accounts maintained by Mid-Southern Bancorp and Mid-Southern Bank) are settled or otherwise accounted for, Mid-Southern Bank will liquidate and distribute its remaining assets to Mid-Southern Bancorp (the "liquidation") and then Mid-Southern Bancorp will dissolve and distribute its remaining assets to its shareholders (the "dissolution").

Mid-Southern Bancorp's shareholders are currently estimated to receive in the dissolution between $15.00 and $17.00 in cash in exchange for each share of Mid-Southern Bancorp common stock owned (the "per share consideration"). Currently, Mid-Southern Bancorp has 2,885,039 shares of common stock outstanding. The per share consideration is subject to significant variation based on various factors including Mid-Southern Bank's equity at the closing of the P&A Transaction; the amount of corporate taxation to be paid by Mid-Southern Bancorp in the P&A Transaction; the regulatory treatment of and costs associated with the liquidation accounts; the amount of cash held by Mid-Southern Bancorp at the closing of the dissolution; costs related to the liquidation and the distribution of Mid-Southern Bank's remaining assets to Mid-Southern Bancorp; costs related to the dissolution and the distribution of Mid-Southern Bancorp's remaining assets to its shareholders; and Mid-Southern Bank's future operating results. Based on these factors, investors should not assume that the ultimate per share consideration distributed to shareholders will be within the range set forth above.

The distribution of cash representing the per share consideration to Mid-Southern Bancorp's shareholders at the closing of the dissolution is expected to occur within several months after completion of the P&A Transaction and the liquidation although delays in the dissolution and liquidation could delay the distribution to shareholders. 

"We're excited to bring the benefits of Beacon Credit Union to Mid-Southern Savings Bank's customers and communities" stated Dustin Cuttriss, Beacon Credit Union President and CEO. "This acquisition is a win – win for everyone involved as it provides Beacon's competitive services and products to new communities and provides a more expansive footprint for our Southern Indiana market. We extend a warm welcome to the customers of Mid-Southern Savings Bank."

"We are thrilled about our new partnership with Beacon Credit Union. We believe it continues our commitment to enhance shareholder value. The synergy created by combining these two companies coupled with the financial strength of the combined institution will assure that our customers, our employees and our communities have expanded opportunities and benefits far into the future," said Alexander (Alex) G. Babey, President and Chief Executive Officer of Mid-Southern Bank. "With a 93-year history and as one of Indiana's largest credit unions, Beacon is a proven leader in providing the highest level of financial services, while also sharing our commitment to strong community support."

The P&A Transaction has been unanimously approved by the boards of directors of Mid-Southern Bancorp, Mid-Southern Bank and Beacon Credit Union and is expected to close in the fourth quarter of 2024, subject to customary closing conditions including the approval of Mid-Southern Bancorp's shareholders and regulatory approvals. Mid-Southern Bancorp's shareholders will vote on the P&A transaction and the dissolution. Mid-Southern Bancorp, as the sole shareholder of Mid-Southern Bank, will vote on the liquidation.

Upon completion of the transaction it is expected that Alex Babey will be joining Beacon Credit Union in a transitional consulting role, James ("Jimmy") King will be named Business Development Officer - Louisville Market, and Erica Schmidt will be retained in an operational leadership role in Salem, IN. Beacon Credit Union intends to keep all of Mid-Southern Bank's branches and LPOs open following completion of the P&A Transaction. 

Luse Gorman, PC is serving as legal counsel to Mid-Southern Bancorp and Mid-Southern Bank, and Piper Sandler & Co., is serving as financial advisor to Mid-Southern Bancorp and Mid-Southern Bank. Barnes & Thornburg LLP is serving as legal counsel to Beacon Credit Union and Donnelly Penman & Partners is serving as financial advisor to Beacon Credit Union.

About Beacon Credit Union

Beacon Credit Union was founded in 1931 by a group of 75 farmers in Wabash, Indiana. Since then, Beacon Credit Union has grown to become one of Indiana's largest credit unions with 19 retail Member Centers and 5 loan production offices ("LPOs") throughout 50 counties in Indiana and services more than 47,000 members. As of September 30, 2023, Beacon Credit Union had over $1.5 billion in assets, nearly $1.0 billion in loans, and over $1.2 billion in member shares and deposits. 

The P&A Transaction will mark Beacon Credit Union's first acquisition of a community bank and continues its strategic expansion into southern Indiana. The combined organization will have approximately $1.7 billion in assets across its Indiana branch footprint with a total of 22 retail Member Center locations and 7 LPOs.

Beacon Credit Union offers traditional financial services as well as non-traditional ones, including investment and insurance services. Beacon Credit Union's 93-year history shows a strong commitment to working with the communities in which it serves. Beacon Credit Union has the banking infrastructure and sophistication that rivals any community or regional bank. Beacon Credit Union focuses on consistently delivering friendly, superior service to its members with attractive, value-enhancing banking products and services. 

About Mid-Southern Bancorp and Mid-Southern Bank

Mid-Southern Bancorp is the holding company of Mid-Southern Bank. As of September 30, 2023, Mid-Southern Bank had approximately $265 million in assets, $144 million in loans, and $206 million in deposits across its three branches in Washington, Orange, and Lawrence Counties in Indiana. Additionally, Mid-Southern Bank has two LPOs, one in New Albany, Indiana and one in Louisville, Kentucky.

Forward Looking Statements

This press release contains forward-looking statements. Forward-looking statements are not historical or current facts and they often include words like "believe," "expect," "anticipate," "estimate," "intend" or similar terminology. Certain factors that could cause actual results to differ materially from those expected include delays in completing the P&A transaction, the liquidation and the dissolution; legislative and regulatory changes that adversely affect the business in which Beacon Credit Union, Mid-Southern Bancorp and Mid-Southern Bank are engaged; and other factors. Except as required by law, neither Beacon Credit Union, Mid-Southern Bancorp nor Mid-Southern Bank undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.

SOURCE Mid-Southern Bancorp, Inc.