Horizon Bancorp has agreed to acquire Lafayette Community Bancorp and its subsidiary, Lafayette Community Bank, through a stock and cash merger.
Under the terms of the merger 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.
On December 29, 2016, Horizon purchased 90,574 shares, or 4.65%, 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.
Established in 2000 and headquartered in Lafayette, Indiana, Lafayette Community Bancorp, through its wholly-owned subsidiary Lafayette Community Bank, serves Tippecanoe County, Indiana 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%.
Horizon Bancorp is a community bank holding company headquartered in Michigan City, Indiana with total assets of $3.2 billion as of March 31, 2017.
Horizon Bancorp’s wholly-owned subsidiary, Horizon Bank, NA (“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.
“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,” said Horizon’s Chairman and Chief Executive Officer, Craig M. Dwight.
“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 our branch locations from northern Indiana and connect to our existing branch locations in the central Indiana market. “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,” Dwight commented.
Horizon has a track record of establishing local advisory boards to maintain the pulse of the local community. Dwight indicated that such an advisory board will be established for the greater Lafayette area following the merger.
Bradley Marley, Chief Executive Officer of Lafayette Community Bank, stated, “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 stated, “We are pleased that the Lafayette Community Bank’s local efforts will continue to be led by myself, Steve Hickman and Dick Murray.” Dwight commented that, “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, stated, “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.”
In addition, Mr. Chosnek commented, “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.