Team Horizon continues to advance their growth through acquisition plan with word this week on a definitive agreement to acquire Lafayette Community Bancorp and its wholly-owned subsidiary, Lafayette Community Bank through a stock and cash merger valued at some $32-million.
Horizon Bancorp says that under the terms of the agreement, shareholders of Lafayette will receive fixed consideration of 0.5878 shares of Horizon common stock and $1.73 in cash for each share of Lafayette’s common stock. Based upon the May 22, 2017 closing price of $25.38 per share, the implied price of Lafayette common stock is $16.64 per share.
Turns out that back on December 29, 2016, Horizon purchased 90,574 shares, or 4.65-percent, of Lafayette’s outstanding common stock from a Lafayette shareholder. Based on the closing price of Horizon’s common stock on May 22, 2017, the transaction value for the shares of common stock, owned by shareholders other than Horizon, is approximately $32.0 million. Shareholders owning less than 100 shares of Lafayette common stock will receive $17.25 in cash for each share.
Lafayette Communithy Bancorp was established in 2000 and is headquartered in Lafayette, Indiana. Through Lafayette Community Bank the financial institution serves Tippecanoe County with four full-service banking locations. As of March 31, 2017, Lafayette had total assets of approximately $172.1 million and total equity of $19.8 million, translating to an equity to asset ratio of 11.49-percent.
Horizon Bancorp is headquartered in Michigan City with total assets of $3.2 billion as of March 31, 2017. Horizon Bancorp’s wholly-owned subsidiary, Horizon Bank, still operates under its charter dating back to 1873, with fifty-nine offices extending throughout northern and central Indiana and southwestern and central Michigan with a loan production office in central Ohio.
Horizon Chairman & CEO Craig Dwight says, “We are enthusiastic about this merger, as it is consistent with Horizon’s philosophy of partnering with banks that hold core values similar to ours and a commitment to serving their local communities.” He adds, “Our complementary product offerings and commitment to engaging the local community is a winning combination for our shareholders, employees, customers and community at large. We believe this shared philosophy will not only enhance Horizon’s franchise value, but also provide value to Lafayette Community Bank’s customer base giving them access to an expanded branch network and a robust product offering.”
Dwight further explained that the merger provides an excellent complement to Horizon’s desire to expand their branch locations from northern Indiana and connect to existing branch locations in the central Indiana market. He notes, “We continue to believe increasing our presence in the Lafayette area will provide Horizon with growth opportunities and the ability to retain and attract seasoned bankers, which are key components to our future success.” Horizon has a track record of establishing local advisory boards to maintain the pulse of the local community, and Dwight has indicated that such an advisory board will be established for the greater Lafayette area following the merger.
Bradley Marley is CEO at Lafayette Community Bank. He says, “We are truly pleased to partner with Horizon Bank and look forward to the opportunities this provides our customers and community. Horizon has our shared commitment to community and understands the impact a true community bank can have by offering local decision-making, community involvement, and personal one-on-one service. These have been the foundations of Lafayette Community Bank and will continue as we join together with Horizon.” In addition, Mr. Marley says, “We are pleased that the Lafayette Community Bank’s local efforts will continue to be led by myself, Steve Hickman and Dick Murray.” Dwight tells us, “Horizon’s philosophy is people first with local leadership who knows the market well. Horizon is delighted to gain such a talented and seasoned banking team.”
Edward Chosnek, founding board member and chairman of Lafayette Community Bank since it opened its doors in 2000, also commented on the deal, saying, “As a lifelong member of the Lafayette community, I have been excited to watch Lafayette Community Bank grow from our opening in a converted tire shop to four locations, three new state of the art facilities, with the fourth currently under construction. Our mission from the beginning was to be a true community bank, with a commitment to serve the Greater Lafayette community, not only by meeting their banking needs in a personal and professional manner, but also contributing to the quality of life in our community.”
Additionally, Chosnek says, “I am pleased that we now have the opportunity to partner with Horizon Bank, who has demonstrated a strong commitment to community involvement, local decision making, retention of local staff and a ‘people first’ philosophy. This partnership will allow us to continue our mission and to provide increased products and services as well as higher lending limits to help us better serve all customers.”
The transaction is expected to be completed in the third quarter of 2017, subject to approval by bank regulatory authorities and the shareholders of Lafayette Community Bancorp, as well as the satisfaction of other customary closing conditions. Lafayette Community Bank will be merged into Horizon Bank, and the combined operations will be continued under the Horizon Bank name.
Lafayette Community Bancorp was advised by Renninger & Associates, LLC and the law firm of SmithAmundsen LLC. Horizon Bancorp was advised by the law firm of Barnes & Thornburg LLP.
