Heartland BancCorp to acquire Victory Community Bank for cash, stock
Heartland BancCorp announced the entry into a definitive agreement whereby Victory Community Bank will merge into Heartland Bank, with Heartland Bank surviving. Under the terms of the merger agreement, Victory will receive 58,934 shares of Heartland common stock and $35.5M in cash, subject to adjustment as set forth in the merger agreement, for all shares of Victory Community Bank common stock that Victory owns, resulting in an aggregate transaction value of approximately $41.1M based on the closing price of Heartland common stock on November 29, 2019. The merger has been unanimously approved by the boards of directors of both institutions, Victory and the shareholders of Victory. The merger is also subject to the receipt of all requisite regulatory approvals and other customary closing conditions and is anticipated to be completed early in the second quarter of 2020. Upon completion of the transaction, John G. "Jack" Kenkel, Jr., currently President and CEO of Victory Community Bank, will join Heartland's Board of Directors. The aggregate transaction value equates to approximately 161.3% of Victory's tangible book value as of September 30, 2019 and 13.0 times its net income for the last twelve months. Based on assumptions prepared by Heartland's management, the merger is anticipated to be approximately 12.2% accretive to Heartland's earnings per share in 2020 and approximately 19.4% accretive to EPS in 2021, resulting in a 3.3-year earnback period. The combined company will have approximately $1.32B in assets. Victory Community Bank is a 16-year old community bank that serves the Northern Kentucky and Greater Cincinnati area, with a focus on residential mortgage lending. At September 30, 2019, Victory Community Bank had assets of $179M, a high-quality loan portfolio of $154M, and an attractive deposit base of $137M with three banking locations in Boone, Kenton and Campbell counties in Kentucky. Its sister company, Victory Mortgage, which is affiliated with Fischer Homes, has mortgage lending offices in Louisville, Columbus, Indianapolis and Atlanta. As part of the merger, Victory Mortgage has entered into a cooperation agreement with Heartland Bank for certain products and services.