German American Bancorp, Citizens Union Bancorp sign $154m merger deal

German American Bancorp, an Indiana-based bank holding company, has signed a merger deal worth around $154 million with Citizens Union Bancorp of Shelbyville (CUB).

The deal was announced in late September 2021.

Based in Kentucky, Citizens Union Bancorp of Shelbyville is the bank holding company for Citizens Union Bank of Shelbyville. The bank’s branch offices are located in Shelby, Jefferson, Oldham, Owen, Spencer, Bullitt, Gallatin, and Hardin counties in Kentucky.

As of 30 June 2021, Citizens Union Bancorp of Shelbyville had total assets of around $1.1 billion, total loans of nearly $707.5 million, and total deposits of close to $889.2 million.

Once the merger transaction is completed, Citizens Union Bank of Shelbyville will be merged into German American Bancorp subsidiary — German American Bank.

German American Bank has 68 banking offices in 19 southern Indiana counties as well as eight counties in Kentucky. As of 30 June 2021, the bank had total assets of around $5.3 billion, total loans of nearly $3 billion, and total deposits of around $4.4 billion.

Based on the financials as on 30 June 2021, the German American Bancorp and Citizens Union Bancorp of Shelbyville will have combined assets of about $6.4 billion following the closing of the merger.

The combined entity will have 83 banking offices across 19 counties in Indiana and 15 counties across Kentucky.

Mark A. Schroeder — Chairman and CEO of German American Bancorp said: “This merger with Citizens Union represents another important, strategic opportunity for German American, and enhances our presence in the vibrant Louisville, Kentucky metropolitan market area. Our combined operations in the broader Louisville market area places us in a top 10 market share position in the largest metropolitan market area in the Commonwealth of Kentucky.

“CUB 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 to CUB’s current and prospective clients. We are excited to welcome the Citizens Union customers, employees, communities and shareholders to the German American family.”

The consideration will be paid in part stock and part cash on a 67:33 basis.

German American Bancorp is estimated to pay about 2.9 million shares of its common stock, and around $49.8 million cash for all the issued and outstanding common shares of Citizens Union Bancorp of Shelbyville.

David M. Bowling — CEO of Citizens Union Bancorp of Shelbyville said: “This strategic partnership with German American, one of the best performing community banking organizations in the nation, will enable us to deepen and broaden the financial services offerings we provide in all our markets.

“Strategically and culturally, we are exceptionally well aligned with German American’s commitment to their community banking business model centered on delivering exceptional customer service and on a willingness to invest in the local communities they serve. German American’s reputation, financial strength and operational capabilities will provide tremendous value to our customers, employees, communities and shareholders.”

The transaction, which is subject to regulatory approvals, Citizens Union Bancorp of Shelbyville’s shareholders’ approvals, and other closing conditions, is expected to close in Q1 2022.