Farmers & Merchants Bancorp, Inc. (NasdaqCM:FMAO) entered into an agreement to acquire Limberlost Bancshares, Inc. for $88.8 million on August 17, 2018. Under the terms of the agreement, Limberlost’s shareholders will be receiving Farmers & Merchants’ common stock, other than as to the 10% of the merger consideration to be paid in cash. Each share of outstanding Limberlost’s common stock will be converted into 1,830 shares (the “Exchange Ratio”) of Farmers & Merchants’ common stock plus $8,465 in cash. Fractional shares of Farmers & Merchants’ common stock will not be issued in respect of fractional interests arising from exchange ratio but will be paid in cash. The exchange ratio is subject to adjustments for stock splits, stock dividends, recapitalization, or similar transactions. On completion, Limberlost will merge with and into Farmers & Merchants, whereupon the separate corporate existence of Limberlost will cease and Farmers & Merchants will survive. Immediately following the merger, Limberlost’s wholly-owned subsidiary, Bank of Geneva, will be merged with and into Farmers & Merchants’ wholly-owned subsidiary, Farmers & Merchants State Bank, with Farmers & Merchants State Bank as the surviving bank. In case of termination, a termination fee of $3.5 million will be paid to Farmers & Merchants. Post completion, Farmers & Merchants’ Board of Directors will appoint Andrew J. Briggs, Chairman of Limberlost and President of Bank of Geneva, to the Boards of Farmers & Merchants and Farmers & Merchants State Bank. The transaction is subject to Limberlost’s shareholders approval, regulatory approvals including of the Ohio Division of Financial Institutions, Federal Reserve and Federal Deposit Insurance Corporation approvals, effectiveness of a Form S-4 registration statement relating to Farmers & Merchants' common stock to be issued in the transaction, listing of Farmers & Merchants' common stock to be issued in the transaction, Farmers & Merchants appointing Andrew J. Briggs to the Boards of Farmers & Merchants and Farmers & Merchants State Bank, Farmers & Merchants entering into a mutually agreed employment agreement with Phillip Lucas providing for employment of Phillip Lucas by Farmers & Merchants, F&M having received an opinion that, for U.S. federal income tax purposes, the Merger will be treated as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code and other customary closing conditions. The transaction is not subject to the approval of shareholders of Farmers & Merchants. The Boards of Directors of both Farmers & Merchants and Limberlost have approved the transaction. As on October 9, 2018 the transaction has been approved by the board of both Limberlost and Farmers & Merchants. The members of the Board of Directors of Limberlost have entered into a voting agreement pursuant to which each of them has agreed to vote their shares of Limberlost's common stock in favor of the merger. The Boards of Directors of Limberlost recommended the transaction to its shareholders. The transaction is expected to complete on December 31, 2018 or early in the first quarter of 2019. Farmers & Merchants expects the transaction to be approximately 12.8% and 15.5% accretive to first and second-year fully diluted earnings per share, respectively. ProBank Austin acted as financial advisor and Thomas C. Blank of Shumaker, Loop & Kendrick, LLP acted as legal advisor for Farmers & Merchants. Michael A. Renninger of Renninger & Associates, LLC received a fee of 1% of the consideration and Ausdal Financial Partners acted as financial advisors while John W. Tanselle and Andrew Podgorny of SmithAmundsen LLC acted as legal advisor for Limberlost Bancshares. Computershare Trust Company, Inc acted as exchange agent to Farmers & Merchants in the transaction. Renninger and Ausdal were paid a fee of $0.01 million upon execution of letter of engagement and an additional $0.04 million upon execution of merger agreement. Limberlost has also agreed to pay a fee of 1% of transaction cost at the closing of transaction, with a credit for the $0.05 million previously paid. Farmers & Merchants Bancorp, Inc. (NasdaqCM:FMAO) completed the acquisition of Limberlost Bancshares, Inc. on January 1, 2019. The transaction was approved by all appropriate regulatory agencies and Limberlost Bancshares's shareholders.