German American Bancorp in Jasper, Ind., has agreed to buy Citizens Union Bancorp of Shelbyville in Kentucky.
The $5.3 billion-asset German American said in a press release Tuesday that it will pay $154 million in cash and stock for the $1.1 billion-asset Citizens Union. The deal, which is expected to close in the first quarter, priced Citizens Union at 155% of its tangible book value.
The acquisition “represents another important, strategic opportunity for German American, and enhances our presence in the vibrant Louisville … metropolitan market area,” Mark Schroeder, German American’s chairman and CEO, said in the release.
Citizens Union “has built a solid community banking franchise in each of the Kentucky markets they serve, giving German American an opportunity to provide our extensive offerings of banking, insurance and investment products and services,” Schroeder added.
The deal is expected to be 14% accretive to German American’s earnings per share during the 12 months after it closes. It should take less than three years to earn back an estimated 3.2% dilution to German American’s tangible book value.
German American plans to cut about 35% of Citizens Union’s annual noninterest expenses. The company expects to incur $19.3 million of merger-related expenses.
David Bowling, Citizens Union’s CEO, will become a regional chairman at German American.