Heartland BancCorp is turning to an Indiana bank to help it keep up with all the growth in central Ohio.
German American Bancorp, based in the southwest Indiana town of Jasper, said Monday it has agreed to buy Whitehall-based Heartland in a deal valued at $330 million.
"All these things happening in Columbus, our balance sheet needed to be bigger,’’ Heartland Chairman, President and CEO G. Scott McComb said. "We’re out there competing with the big guys.’’
McComb said Heartland looked at buying a smaller bank or one that was about the same size, but there weren't enough good choices.
That left turning to bigger banks that Heartland could partner with, but Heartland had a list of demands that had to be met first, McComb said.
"They must have the same family culture, perform the same or better than we do, have complementary products and services and technology," he said.
Heartland also didn't want a bank that operates in the same territory as it does and would be public so that Heartland shareholders could sell their shares if they wanted, he said.
"There are only a few franchises that fit that mold," he said.
Heartland customers won't see any changes
The Heartland brand will stay for now and customers shouldn't notice any changes, he said.
"They shouldn’t recognize anything has changed other than we're stronger and better together," McComb said.
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The deal might even allow Heartland to keep customers for longer since the combined bank will be able to offer more services, such as wealth management and trust services, he said.
What does the deal mean for workers?
Heartland has 20 banking offices with $1.9 billion in assets, $1.5 billion in loans and $1.6 billion of deposits.
The bank has about 300 workers, and there likely will be some losses, McComb said. How many workers may be affected is too soon to say.
But over time, the bank could add more workers because of growth at the bank and the region, he said.
McComb will no longer be CEO, though he will be on the board of the combined banks. McComb's leadership team will remain.
"I’ve grown this team," he said. "They’re totally capable of doing great things in the markets they serve. ... It's been a great ride. Frankly, I think our best years are ahead of us."
Heartland has been a steady grower
Founded in 1988 with the purchase of Croton Bank, Heartland touts its close ties to its communities that it serves while putting a big focus on small-business lending.
The bank has been a steady grower over the years, expanding from its central Ohio roots to Cincinnati in 2019 and to Florida in 2021 with a loan office .
Heartland is the ninth biggest bank in central Ohio in terms of deposits, according to the most recent federal data, with 1.4% share of the market.
On Monday, Heartland reported profit of $5.1 million, or $2.45 per share, for the three months that ended June 30.
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Settlers along the Ohio River in southern Indiana started German American in 1910.
"It’s a community bank similar to Heartland just bigger,’’ he said.
The combined bank will have more than $8.1 billion in assets and a branch network of almost 95 rural, suburban and urban locations across southern Indiana, central and northern Kentucky, and central and southwest Ohio.
The deal is expected to close early in 2025.
Heartland shareholders will receive 3.9 shares of German American stock for each share of Heartland stock. The deal values each share of Heartland stock, which closed at $91.95 Monday, at $155.37.
Shares jumped 55% to $143 in trading Tuesday.
“This strategic partnership will bring together two high-performing, community-oriented organizations and expand German American’s footprint into Columbus and Cincinnati, Ohio, two of the most vibrant and fastest-growing markets in the Midwest,” D. Neil Dauby, chairman and cEO of German American, said in a statement.
mawilliams@dispatch.com
@BizMarkWilliams
This article originally appeared on The Columbus Dispatch: Heartland BancCorp to be sold to Indiana bank in $330 million deal
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