Under the terms of the merger agreement, each Northumberland shareholder received a fixed exchange ratio of 1.1850 shares of Mifflinburg (later Steele Bancorp) common stock, plus cash in lieu of fractional shares, in a transaction structured as a tax-free reorganization. At signing, the deal was valued at approximately $34.2 million based on Mifflinburg's September 23, 2024 closing stock price, and Northumberland shareholders were expected to own approximately 46% of the combined company. In its fairness opinion analysis for the Northumberland board, financial advisor J. Alden Associates, Inc. calculated an implied transaction value of approximately $34.12 million, or $26.01 per Northumberland share (based on Mifflinburg's September 20, 2024 closing price of $21.95), equal to 71.1% of Northumberland's tangible book value, 17.2 times Northumberland's last-twelve-months earnings, 22.1 times Northumberland's estimated 2025 earnings per share, a core deposit premium of negative 3.00%, and a 24.5% premium to Northumberland's then-current trading price. A relative contribution analysis as of June 30, 2024 showed Northumberland contributing 54.9% of combined total assets, 56.1% of combined deposits, 46.8% of combined tangible common equity, and only 21.4% of combined net income, against Mifflinburg's 78.6% net income contribution, versus the agreed 1.185x exchange ratio.
The combined company's board of directors consists of six members from each legacy company. J. Donald Steele, Jr., formerly Northumberland's chairman, became chairman of the combined Steele Bancorp and Central Penn Bank & Trust; Mifflinburg's Richard J. Drzewiecki became vice chairman; Jeffrey Kapsar continued as President and CEO; and Troxell became Senior Executive Vice President, Chief Administrative Officer of the bank and Corporate Secretary of the holding company. At signing, the combined company was projected to have approximately $1.3 billion in total assets, $1.1 billion in total deposits, $850 million in total loans and $93 million of combined shareholders' equity based on year-end 2023 financials.
Mifflinburg's board, in approving the deal, considered pro forma projections assuming closing on April 11, 2025 and 50% realization of estimated cost savings in 2025: projected combined net income of approximately $11.5 million in 2025, earnings-per-share accretion to Mifflinburg shareholders of approximately 7.0% in 2025 and 56.3% in 2026, a 2026 return on assets of 1.24% and return on average equity of 15.83%, tangible book value dilution earnback in approximately 2.75 years, and an increase in the combined bank's pro forma Tier 1 leverage ratio from 7.59% at closing to more than 8.0% by the end of 2026. The S-4 pro forma financial statements separately disclose that the combined company expects to realize cost savings approximating 14% of the combined companies' anticipated non-interest expense base, though these savings are excluded from the pro forma financial statements themselves. The merger agreement provided for a termination fee of $1,400,000 payable by either party under specified circumstances, including a competing acquisition proposal. The background-of-the-merger narrative in the S-4 describes only bilateral negotiations between Mifflinburg and Northumberland; Alden's opinion states it "did not and was not asked to contact any other interested parties," indicating no other bidders were solicited or considered.
The transaction received shareholder and regulatory approvals and closed on August 1, 2025. At closing, Mifflinburg changed its name to Steele Bancorp, Inc. (OTCID Pink: STLE) and Mifflinburg Bank and Trust Company was renamed Central Penn Bank & Trust. Northumberland shareholders received an aggregate of approximately 1.55 million shares of Steele common stock plus cash for fractional shares. Following completion, the combined company reported total assets of approximately $1.34 billion, deposits of approximately $1.16 billion and loans of approximately $904 million, operating 13 banking offices across Centre, Northumberland, Snyder and Union counties, Pennsylvania.
On the financial advisory side, J. Alden Associates, Inc. (Alden Investment Group) served as exclusive financial advisor to Northumberland and delivered a fairness opinion dated September 23, 2024 to Northumberland's board that the conversion ratio was fair, from a financial point of view, to Northumberland shareholders. The Kafafian Group, Inc. served as financial advisor to Mifflinburg and also delivered a written fairness opinion to Mifflinburg's board that the merger consideration was fair to Mifflinburg shareholders from a financial point of view, a detail confirmed in the merger agreement's representations that is not disclosed in the previously available source summary. Legal counsel to Northumberland was Mette, Evans & Woodside; legal counsel to Mifflinburg was Stevens & Lee.