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Credit union acquiring Indiana-based Commerce Bank

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Credit union acquiring Indiana-based Commerce Bank

Indianapolis-based Indiana Members CU agreed to acquire Evansville, Ind.-based Commerce Bank in an all-cash deal.

The deal is expected to close in the first quarter of 2020, after which Commerce Bank and its holding company First Light Bancorp will settle their remaining obligations and distribute their remaining cash to First Light Bancorp stockholders. First Light Bancorp estimated that shareholders will receive between $11.25 and $11.40 in cash for each share they own.

Commerce Bank's management and employees will lead the credit union's efforts to expand in the Greater Evansville and Clark/Floyd County communities, according to a news release.

On an aggregate basis, S&P Global Market Intelligence calculates that the deal value is 156.5% of common equity and of tangible common equity, and is 28.1x earnings. The deal value is 17.73% of assets, 21.99% of deposits, and the tangible book premium-to-core deposits ratio is 9.86%.

S&P Global Market Intelligence valuations for bank and thrift targets in the Midwest region between Aug. 13, 2018, and Aug. 13, 2019, averaged 155.58% of book and 156.96% of tangible book and had a median of 18.34x last-12-months earnings, on an aggregate basis.

Indiana Members will enter Vanderburgh County, Ind., with three branches to be ranked ninth with a 1.79% share of approximately $5.27 billion in total market deposits and will enter Clark County, Ind., with one branch to be ranked eighth with a 3.24% share of approximately $1.71 billion in total market deposits.

Based on its latest regulatory filing, First Light Bancorp has total equity capital of $20.4 million, with common stock valued at $18.3 million.

Indiana Members CU had total assets of $2.01 billion and Commerce Bank had total assets of $195.8 million, both as of June 30, according to S&P Global Market Intelligence data.

Keefe Bruyette and Woods was financial adviser to First Light Bancorp and Commerce Bank in the deal and Smith Amundsen provided legal counsel. Krieg DeVault and Renniger & Associates were Indiana Members CU's advisers.

To use S&P Global Market Intelligence's branch analytics tools to compare market overlap, click here. To create custom maps, click here.

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