MutualBank merged with Universal Bancorp, the holding company of BloomBank. As a result of the merger, each share of Universal Bancorp common stock will be exchanged for 15.6 shares of MutualFirst common stock and $250.00 in cash.
The merger is expected to be accretive to MutualFirst’s earnings per share in 2018. With cost savings fully implemented in 2019, the accretion is projected to be approximately 13%. The tangible book value dilution at closing of 3.1% is expected to be earned back in approximately 2.2 years using the “crossover” method. Key transaction assumptions include a gross loan credit mark of $4.4 million and MutualFirst expects to realize 25% cost savings on BloomBank’s non-interest expense.
“We are looking forward to the next step and the benefits that are expected from integrating the two companies,” said David W. Heeter, president and CEO of MutualFirst. “Merging with Universal is a beneficial transaction that will enable us to increase the value of the franchise for the benefit of our shareholders.”
William B. McNeely, president of Universal, noted, “We are pleased to join with a partner like MutualFirst that shares our commitment to community banking. The larger size of the combined company will benefit our customers and communities with a broader array of products and services.”
As a result of the merger, MutualFirst now has consolidated assets of $2 billion and 40 branch offices located throughout Indiana.
Keefe Bruyette & Woods served as financial advisor to MutualFirst, with Silver, Freedman, Taff & Tiernan serving as legal counsel. Boenning & Scattergood served as financial advisor and rendered a fairness opinion to Universal, with SmithAmundsen acting as their legal counsel.
