Southern Indiana Business Report
JASPER – German American Bancorp Inc. and Heartland BancCorp announced Monday that they have entered into a definitive agreement to merge Heartland into German American in a deal valued at $330 million.
Upon completion of the transaction, Heartland’s subsidiary bank, Heartland Bank, will be merged into German American’s subsidiary bank, German American Bank, and operate under a co-branded name within the Ohio markets.
German American Bank is headquartered in Jasper and the merger will allow German American to expand into Ohio markets.
As of June 30, 2024, Heartland operated 20 full-service banking offices and had approximately $1.9 billion of total assets, $1.5 billion of total loans and $1.6 billion of total deposits. Giving effect to the merger today, the combined organization will have more than $8.1 billion in assets and a branch network of almost 95 rural, suburban and urban locations across Southern Indiana, Central and Northern Kentucky and Central and Southwest Ohio.
“This strategic partnership will bring together two high-performing, community-oriented organizations and expand German American’s footprint into Columbus and Cincinnati, Ohio, two of the most vibrant and fastest-growing markets in the Midwest,” stated D. Neil Dauby, chairman and CEO of German American. “We share the same culture and commitment to serving our customers and our communities with a relationship-based approach. We are excited to welcome Heartland’s customers, employees, communities and shareholders to the German American family.”
Dauby continued, “We expect this strategic transaction will be materially accretive to German American’s earnings per share during the 12 months following completion of the transaction with a relatively quick tangible book value earn back period. German American’s pro forma capital ratios will continue to significantly exceed regulatory well-capitalized levels providing ongoing financial strength and future growth opportunities.”
G. Scott McComb, chairman, president and CEO of Heartland stated, “This strategic partnership allows us to partner with another like-minded, larger community bank that enables us to continue our strong brand and growth trajectory within the markets we serve. It will also allow us to deepen and broaden our current and prospective customer relationships with enhanced financial service offerings. Strategically and culturally, Heartland and German American are exceptionally well-aligned with a strong commitment to the community banking business model. That model, centered on delivering the exceptional customer experience and willingness to invest in local communities that Ohio has come to know and love from Heartland, will propel our future success.”
McComb is expected to join the German American and German American Bank boards of directors while members of the Heartland executive and senior teams are expected to stay on as regional management to provide local leadership and decision making.
In addition to McComb, Ronnie Stokes, a current Heartland board member, is also expected to join the German American and German American Bank boards of directors.
Under the terms of the definitive agreement, Heartland shareholders, other than the Heartland retirement plan, will receive 3.90 shares of German American common stock for each share of Heartland common stock in an all-stock, tax-free exchange. The shares held by the Heartland retirement plan will be exchanged for an equivalent cash payment. Based on the number of Heartland common shares expected to be outstanding at closing, German American would issue approximately 7.66 million shares of its common stock.
The all-stock transaction has been unanimously approved by each company’s board of directors and is expected to close in the first quarter of 2025, subject to regulatory approval, approval by both German American and Heartland shareholders and completion of other customary closing conditions.
Keefe, Bruyette & Woods, Inc., A Stifel Company served as financial advisor on the transaction to German American and Dentons Bingham Greenebaum LLP served as legal counsel.
Raymond James & Associates Inc. served as the financial advisor on the transaction to Heartland and Hunton Andrews Kurth LLP served as legal counsel.
About German American
German American was founded in 1910 and is headquartered in Jasper. It has grown to operate 77 offices in 19 Indiana counties and 14 counties in Kentucky. GAB has more than 900 employees.